[1994] HCA 4
Travel Compensation Fund v Robert Tambree (t/as R Tambree & Assocs) (2005) 224 CLR 627
[2005] HCA 69
Wallace v Kam (2013) 250 CLR 375
Judgment (26 paragraphs)
[1]
decision
Mr Moore's claim for damages against the defendant legal practice ("the legal practice") is one of the five related matters heard together by me, of which I have first given judgment in the claim brought by Ms Lavars (Lavars v Gillis and Ors [2022] NSWSC 13) ("principal judgment"). Evidence in one case stood as evidence in the others. Like the other plaintiffs, the basis of Mr Moore's claim for damages from the legal practice is its alleged negligence in providing legal advice relating to the settlement of proceedings brought separately in the Federal Court of Australia, but heard together for the recovery of employment benefits due on termination of employment, and damages for wrongful dismissal following the termination of his employment as the result of the merger of St George Bank ("SGB") with Westpac Banking Corporation ("Westpac") in the period from 2008 to 2010. Mr Moore's employment was terminated on 11 May 2010, about four weeks after he had commenced his Federal Court proceedings, on 13 April 2010 claiming his unpaid entitlements.
Mr Moore's claim impugns the advice given by the legal practice, and in particular by the first defendant, Mr Gillis, a partner in the firm, prior to the commencement of the Federal Court proceedings and in relation to compromise of those proceedings during their currency. The pre-litigation advice was given in late 2009 and the settlement advice was given principally in December 2011. His case is that the advice, to use a neutral expression for present purposes, was erroneous and in reliance upon it he suffered economic loss consisting of the loss of his claimed entitlement to a redundancy payment in December 2009, the loss of a real and valuable opportunity to settle the Federal Court proceedings in December 2011 on terms far more favourable than the judgment obtained in the Federal Court, liability for Westpac's costs of the proceedings on an indemnity basis following his rejection of an offer to compromise, and wasted costs paid or due to the legal practice after the rejection of the offer to compromise. This is putting it broadly. His cause or causes of action are categorised in various ways including negligence, whether in tort or under the contract of retainer, misleading or deceptive conduct in contravention of s 18 Australian Consumer Law (NSW) ("ACL"), the text of which is contained in Schedule 2 Competition and Consumer Act 2010 (Cth) ("CCA") and applied by s 32 Fair Trading Act 1987 (NSW) ("FTA"), and breach of the obligations of a fiduciary nature that Mr Gillis owed him in his capacity as a solicitor having regard to Mr Moore's status as his client.
As I observed in the principal judgment (at [5]), although heard together each case is essentially different and the outcome in each depends upon its own facts. For this reason, I decided to deal with each matter in a separate judgment. In my principal judgment, I stated the principles of law which are equally applicable to each case and identified other general facts which form the context common to all. I will apply those legal principles in this case without repeating and reciting them in the body of this judgment. As evidence in one case stands as evidence in the other, so far as is relevant to each case individually, I propose to incorporate by reference to findings made in my principal judgment common findings of fact referable to all cases without re-evaluating the evidence supporting those findings. It follows that this judgment assumes familiarity with the principal judgment.
The applicable principles of law governing the law of negligence are set out in the principal judgment at [6] - [24]. The principles of law relevant to the claim for breach of fiduciary duty are summarised at [152] - [156]. It will be necessary for me to identify the principles of law relating to the claim based on misleading or deceptive conduct as applicable in the course of this judgment.
[2]
Mr Moore's employment with St George Bank
As I stated in the principal judgment (at [27]), in May 2008 SGB and Westpac announced their proposed merger. They agreed on a scheme of arrangement which was approved on 17 November 2008 and the merger was completed on 1 March 2010. The new entity thereafter operated as a single authorised deposit-taking institution, even if at the retail level, the two banks appeared to continue separate operation. Westpac guaranteed all of SGB's interests and liabilities.
Mr Moore had commenced employment with SGB on 1 September 1994 as a Senior Foreign Exchange Dealer. By about the beginning of 2007 he had risen to be Head of the Currency and Option Trading Group.
His letter of offer of employment which led to his initial appointment with SGB stated that his employment could be terminated with four weeks' notice or payment in lieu. His remuneration with SGB consisted of a base salary and subject to satisfactory performance of the duties of the position to which he was appointed, he was entitled to participate in certain bonus schemes offered by SGB to executives employed within SGB's Institutional Banking Treasury Division where Mr Moore's group was located for organisational purposes.
Like other key executive staff in the Treasury Division, by letter dated 18 June 2018, SGB offered Mr Moore a Retention Incentive Payment ("RIP") if certain market performance targets were met by SGB and each employee concerned remained in their employment with SGB as at 13 November 2008. I have summarised these matters in my principal judgment at [28] - [30]. A discrepancy arose between the Earnings per Share Target ("EPS") published to employees of 8 to 10 percent and the EPS target in fact set by SGB's Board of 10.1 percent. The published target was met, but not the Board's target and SGB declined to pay the RIP to the executives concerned including Mr Moore.
By letter dated 28 November 2008 (Exhibit 3, p. 1), Mr Moore was seconded to Westpac from 1 December 2008. Under SGB's secondment policy, secondment was for a maximum period of 12 months with no possible extension. Griffiths J, the trial judge in the Federal Court, held that the secondment policy and SGB's redundancy policy were terms of Mr Moore's contract of employment. The role which Mr Moore was assigned at Westpac was that of "Proprietary Trader". Mr Moore found that difficulties arose because he was expected to meet significantly higher budgets at Westpac without the provision of appropriate support and Westpac's bonus and incentive scheme applicable to the seconded position was not as generous as SGB's resulting in a fall in his remuneration (affidavit Stuart Moore sworn 16 May 2018; CB 1; tab 12; p. 197 [7]).
[3]
The outcome of the Federal Court proceedings
As I have said, proceedings had been commenced on Mr Moore's behalf on 13 April 2010. As finally amended, the claim was that his contract of employment had been repudiated by SGB and that he was entitled to the redundancy payment and reasonable notice on the basis that his "pay" included his full remuneration being the aggregate of his base salary and bonuses. Mr Moore also claimed bonuses while on secondment to Westpac and the RIP. Like Ms Lavars, Mr Moore also withdrew a claim for damages for deceit, misleading or deceptive conduct and negligent misstatement in connection with the RIP.
As I found in my principal judgment (at [104]), on 21 March 2012 Westpac conceded the RIP issue and its solicitors wrote to the legal practice stating that they were instructed that Westpac consented to judgment being entered for each of the then 7 claimants for the amount for the RIP due to each of them together with interest from 13 November 2008 when the RIP was due. This occurred on 2 April 2012. Judgment in Mr Moore's favour on his outstanding claims was not entered until 27 March 2015 (Murphy v Westpac Banking Corporation (No 2) [2015] FCA 266 at [81]). On that day Griffiths J entered judgment in favour of Mr Moore in the sum of $67,825.57 together with interest from 11 May 2010 to 27 March 2015 in the sum of $25,025.09. This represented Mr Moore's only success on the issues that went to trial being an additional amount for reasonable notice at his base salary. Griffiths J found a period of four months to be reasonable and the sum awarded represented payment due for this period less the period of four weeks actually paid on termination of his employment.
The litigation before Griffiths J was complex involving many issues, not all of which affected each claimant. Even common issues affected those involved differently. Many sub-issues were determined in Mr Moore's favour, but he failed on the major issues to which they related because an essential element of the relevant cause of action was adjudged to be absent or, on one share bonus claim at least, the pleadings were insufficient to support the issue.
In his affidavit sworn on 12 June 2018, David Eric Collinge, a partner in the legal practice (at [18], CB 1, Tab 13A, pp. 220 - 1) stated that on 2 April 2012 judgment was entered in favour of Mr Moore on his RIP claim in the sum of $48,000 and interest. No order as to costs was then entered. On 27 March 2015 judgment was entered in favour of Mr Moore in the sum of $67,825.57 plus interest from 11 May 2010 to 27 March 2015. Interest on the RIP judgment was in the sum of $13,467.30 and on the 27 March 2015 judgment, $25,025.09. This brought the total judgment recovered by Mr Moore to $154,317.96. As this was less favourable to Mr Moore than the offer to compromise served on 2 December 2011 in the sum of $600,000 in addition to costs as agreed or assessed, Griffiths J, in accordance with Rule 25.14 Federal Court Rules 2011 (Cth) ordered Westpac to pay Mr Moore's costs on a party and party basis up to and including 11 a.m. on 6 December 2011, and Mr Moore to pay Westpac's costs on an indemnity basis for the period from 11 a.m. on 6 December 2011.
[4]
Redundancy entitlement advice in 2009
The first basis of Mr Moore's claim against the law practice relates to the advice Mr Gillis, the partner principally handling Mr Moore's case on behalf of the law practice, gave in relation to the circumstances of Mr Moore's secondment and his potential entitlement to a payout for redundancy.
Mr Moore's claim in respect of the December 2009 advice is that Mr Gillis negligently failed to advise him that unless he insisted on returning to his former, or a comparable, position at SGB upon the completion of the non-extendable secondment period of 12 months, as Ms Lavars had, there was a real risk that he would lose his valuable rights to a redundancy payment on retrenchment. I have set out the objective circumstances above (at [14]). To those circumstances may be added what follows. Mr Moore's letter of 24 December 2009 contained the following passages:
"I accept the termination of my employment by [SGB] by way of redundancy and expressly reserve all of my rights and entitlements from the termination of my employment with [SGB].
…
As a matter of courtesy, I wish to inform you that I will be commencing proceedings against [SGB] for my redundancy and other entitlements owed to me from the termination of my employment with [SGB]."
Despite a dispute about the matter, Griffiths J accepted that Mr Moore, while working at Westpac, was on secondment and that "all secondments were temporary in the sense that they were subject to a non-extendable cap of 12 months" (Murphy & Ors v Westpac Banking Corporation [2014] FCA 1104 at [1257]). However, his Honour accepted the bank's argument that rather than having accepted SGB's repudiation of his contract of employment, "Mr Moore's conduct in late 2009 and then in 2010 up until his employment was terminated is consistent with him having elected to affirm his SGB contract and continue with it, rather than accept what he described at SGB's repudiation of the contract and bring about its termination" ([1258]). The relevant conduct was:
1. Mr Moore continued to turn up for work as before;
2. accepted payment from SGB for the work he continued to do at Westpac's premises;
3. engaged in discussions as to the basis upon which his SGB employment might be terminated by resignation; and
4. embarked upon performance counselling pursuant to SGB's performance counselling policy.
It is perhaps notable that the content of the letter of 24 December 2019 drafted by Mr Gillis is not one of the factors establishing that Mr Moore had affirmed his contract ([1258] - [1259]). It was "by his conduct" that "Mr Moore elected to affirm his SGB contract of employment. All his conduct is inconsistent with the assertion in his 24 December 2009 letter that he accepted the Bank's repudiatory conduct" ([1263]).
[5]
Cross-examination of Mr Moore
In cross-examination Mr Moore accepted that Mr Gillis advised him that SGB had repudiated his contract of employment by demonstrating that they did not consider themselves bound by it, including the redundancy policy (452.25T). He denied receiving advice about election (452.30T). He was adamant there was no advice that if he stayed on at Westpac he would be agreeing to the variation (452.35T). He accepted that Mr Gillis advised him he should leave SGB and bring the contract to an end (452.50T). And he agreed that he explained to Mr Gillis that he needed the income and would have raised his family situation (452.40T - 453.10T). Mr Moore also accepted that Mr Gillis advised him that if he left his employment, he would get his redundancy (453.18T) (my emphasis).
Mr Moore accepted most of Mr Gillis's account of the various conversations when they were put to him in cross-examination, but denied being told "to best protect your redundancy entitlements you should leave" (454.50T - 455.1T). He did not recall Mr Gillis referring to Ms Lavars's position (456.30T), at least immediately before the 24 December 2009 letter was drafted. Mr Moore said Mr Gillis may have said it earlier in the piece (456.35T). And he denied it was made clear to him that there was a real risk that if he stayed on at Westpac, he may not get his redundancy (457.12T). At the time Mr Moore felt he was making the right choice, staying on at Westpac rather than leaving (457.34T).
Although Mr Moore did not recall Mr Gillis advising him orally that the letter of 24 December 2009 was not the preferred approach, he recalled reading it in the covering email (458.15 - .26T).
Mr Moore also said in the context of needing the income that, "I wanted a redundancy or a job." (501.4T).
[6]
Cross-examination of Mr Gillis
In cross-examination, Mr Gillis was pressed about the advice in his email of 23 December 2009 that the letter of 24 December 2009 purporting to elect to accept SGB's repudiation of his contract of employment was not the preferred approach for Mr Moore, but was not fatal to his claim (985.25T - 989.12T). The thrust of the cross-examination was that the gravamen of the advice was although not the preferred approach it was not fatal to Mr Moore's claim for a redundancy payment. Mr Gillis's response was (988.20T):
"… as to the approach that I recommended, that is, you should leave and when he didn't leave we were trying to engineer a way that he could preserve, as best he could, his redundancy entitlements by him continuing to stay there."
On the basis that Mr Moore was not prepared to accept advice "to leave cold" (988.27T) because he wanted the income, the preferred approach was for Mr Moore to accept SGB's repudiatory conduct, terminate his contract of employment, claim his redundancy and look for another job (988.39T).
[7]
Resolution of the December 2009 claim
There is obviously a very significant difficulty in resolving the factual dispute about what advice was given when in December 2009. Both Mr Moore and Mr Gillis are asked to recall events which occurred 10 years before giving evidence. In Mr Moore's case, he had been through what must have been a traumatic and disappointing, long trial with an outcome that was near ruinous in financial terms. Hindsight is likely to have been a confounding factor affecting the accuracy of his recall. Mr Gillis's recall as I have said is also likely to have been affected even if only by the effluxion of time. I was asked to find that Mr Gillis was evasive when closely cross-examined about the email of 23 December 2009. He did not strike me that way. I accept he was somewhat loquacious and to a degree combative during the cross-examination about this topic, never attractive qualities in a witness because they detract from the clarity of the narrative of what the witness saw, heard or otherwise perceived of relevant facts. But by then, Mr Gillis had been cross-examined by two counsel about a number of cases and many topics over several days and a degree of exasperation was understandable. I do not regard either Mr Moore or Mr Gillis as having given deliberately false evidence. Both were attempting to do their best to recount their recollection as accurately as they could now in circumstances of relative disadvantage.
In my judgment the contemporaneous documents, such as they are, and the apparent logic of events generally favour Mr Gillis's account over Mr Moore's. It is not insignificant that Mr Moore's affidavit failed to recount all of the salient exchanges from the large number of conversations had with Mr Gillis from late November 2009 to 23 December 2009. When cross-examined he agreed with most of the detail contained in Mr Gillis's affidavit in most respects. The sticking point was whether he had been informed that the alternative option of remaining at work drawing his salary involved greater risks so far as the viability of his claim for a redundancy was concerned than the preferred approach advice given by Mr Gillis that he should, like Ms Lavars, return to SGB's place of work, that is "leave" Westpac, to lay a secure foundation to claim his redundancy.
Although SGB offered an ex gratia payment on resignation in mid-December 2009, it is clear that SGB was not going to voluntarily make Mr Moore redundant, any more than they were prepared to voluntarily retrench Ms Lavars. The evidence was that Mr Moore's entitlement to a redundancy under SGB's policy amounted to 58 weeks of remuneration, including a period of notice (990.5T). In Mr Gillis's view at the time the rate was not calculated simply by reference to Mr Moore's base salary, but to his total remuneration being the aggregate of base salary, bonuses and other incentives. This was substantially more valuable than the offer made, and Mr Moore without Mr Gillis's advice was certainly not prepared to accept it.
[8]
Immunity
In Giannarelli v Wraith (1988) 165 CLR 543; [1988] HCA 52 (at 559 - 560) out of court work performed by a legal practitioner for a client including the giving of advice is subject to advocates immunity where it 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." From that field the decisions of the High Court of Australia in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16 and Kendirjian v Lepore & Anor (2016) 259 CLR 275; [2017] HCA 13 carved out an area involving the giving of advice on settlement. As Edelman J (with whom the other members of the Court agreed) explained in the second case (at [32]), immunity does not cover giving advice on settlement because "the giving of advice either to cease or to continue litigating does not itself affect the judicial determination of a case".
To my mind there is no suggestion that the immunity does not apply to the advice given by Mr Gillis to Mr Moore about his potential entitlements under SGB's redundancy policy. As I have pointed out above (at [22]) in his letter of 24 December 2009 drafted by Mr Gillis, Mr Moore informed SGB that he would be commencing legal proceedings for his redundancy and other entitlements consequent upon his purported acceptance of SGB's repudiation of his contract of employment by failing to return him to his former, or a comparable position at the conclusion of the non-extendable period of secondment. Moreover, I accept that Mr Gillis advised Mr Moore, although the letter was not "the preferred option" the purpose of the alternative strategy was to pursue an entitlement to damages, "those damages being [Mr Moore's] redundancy" (see [30] above).
If I am wrong in my factual analysis of the negligence issue, I am of the view that in any event the legal practice is not liable for the consequences of any negligence by dint of the operation of the doctrine of advocates immunity.
[9]
Contingent quantum determination
As the redundancy entitlement claim is separate from the other claims it is appropriate to deal with the quantum issue now contingently. The evidence (990.5T) is that Mr Moore's redundancy entitlement (including the period of six weeks in lieu of notice) was 58 weeks' pay. It is no longer in issue that by reason of Griffiths J's principal judgment ([2014] FCA 1104) that, in the redundancy policy, pay means base salary and a person entitled to a redundancy package was not also entitled, as a separate head of damages, to a payment in lieu of reasonable notice. For the 58 weeks, Mr Moore claimed a rounded figure of $290,000. Mr Moore's base salary when his employment was terminated in May 2010 was $264,586 per annum. For 58 weeks his base salary would total $295,115, omitting some cents. From this figure it is of course necessary to deduct the employment benefits Mr Moore has actually received during the period.
In my opinion, the period commences on 1 December 2009, when if he had accepted Mr Gillis's advice his period of secondment would have come to an end and he would have returned to SGB's premises evincing a readiness, willingness and ableness to take up his former, or some comparable, position in the then non-existent Treasury Division of SGB's operations. Instead he continued to work at Westpac, drawing his salary, from 1 December 2009 until 11 May 2010, a period of 23 weeks. He also received 4 weeks salary in lieu of notice on the termination of his employment. Griffiths J determined that he should have been paid 4 months' salary in lieu of notice, a period of 17.33 weeks, but Westpac should have a credit for the four weeks already paid. This reduced the period for which damages were paid to 13.33 weeks. Accordingly, Mr Moore, by rejecting Mr Gillis's advice, has received, one way or another, his salary for a period 40.33 weeks which must be taken into account in the notional assessment of his damages.
It follows that in total by staying on at Westpac (albeit notionally as a SGB employee) Mr Moore lost about 18 weeks of the salary he would otherwise have received as part of his redundancy together with interest at Federal Court rates from 1 December 2009 to 27 March 2015. Mr Moore's salary on a weekly basis was $5,088.19. The sub-total then is $91,587.46 before interest. As this sum would have been payable as an eligible termination payment ("ETP") and subject to tax if paid by Westpac, it would be necessary to calculate Mr Moore's after-tax entitlement if paid in 2009 for the calculation of damages. This is not information available to me. Naturally he would be entitled to receive interest under s 100 Civil Procedure Act 2005 (NSW) from 27 March 2015, which I take to be the date on which his cause of action for economic loss would have accrued, until the date of this judgment.
[10]
Mr Moore's second claim
I will now deal in turn with Mr Moore's second and third claims. To recap, the second claim relates to the advice Mr Gillis gave him concerning an offer to compromise made by Westpac under Rule 25.01 Federal Court Rules on 2 December 2011. Mr Moore relies upon an alleged contravention of s 18 ACL and negligence.
The third claim relates to advice given by Mr Gillis in relation to the component of the global offer made on 15 December 2011 referable to Mr Moore's claim. Mr Moore propounds a breach of Mr Gillis's fiduciary obligations and negligence. From my principal judgment the global offer was subject to a "one in, all in" stipulation (see principal judgment [78]). Before dealing separately with the issues raised by each of these claims it is necessary to deal with important background facts referrable to Mr Moore's proceedings in addition to the matters dealt with in my principal judgment.
[11]
Developments between May 2010 and November 2011
Before the termination of Mr Moore's employment, he felt frustrated by the failure of SGB/Westpac to allocate bonus shares to him under a Medium Term Incentive Plan ("MTIP") or bonus scheme applicable to him. Mr Moore's understanding of the MTIP rules was that there were no individual performance hurdles which would apply (Exhibit 3, p. 150). When he raised this, he was informed that his entitlement depended upon a number of factors including his "individual performance and continued employment" (Exhibit 3, p. 164). He did not accept that this was correct. His case included a claim for this entitlement.
Although his case had only recently been commenced, Mr Moore's claim was included in arrangements for a mediation of all 23 SGB claims on which Mr Gillis was acting to be held at the offices of Westpac's solicitors commencing on 24 May 2010 and continuing for 3 days. The mediator was the Honourable Ian Callinan QC. Mr Moore's mediation was conducted on 26 May 2010. Mr Robert Goot SC had been involved in the preparation of the material for mediation, but Mr Moore was to be represented by Mr Michael Cranitch SC and Mr David O'Dowd of Counsel at the mediation. On 20 May 2010, Mr Gillis provided Mr Moore with a summary position paper which he described as expressing "the claim at its highest" (Exhibit 3, p. 167). There is nothing unusual in a claimant putting his or her best foot forward for the purpose of mediation. The heads of claim included 12 months' notice at Mr Moore's full remuneration including bonuses, his redundancy entitlements, again at full remuneration, the value of his shares under the MTIP, the RIP and what was described as a short payment in his bonus for 2008/2009 on a pro-rata basis. Credit was given for his salary between 1 December 2009 and 11 May 2010 and an amount for a bonus actually paid. The claim totalled $1,374,026. When interest and costs were added the total increased to $1,459,857.
Although Mr Moore referred to the position paper prepared for the May 2010 mediation, he did not make any reference in his affidavit to what happened at the mediation (459.50T). From his recollection, he did not believe that Westpac were interested in mediating with him at that point because his case had "just arrived to them" (460.9T). It was his belief that neither counsel nor Mr Gillis discussed his case with him "at that point" (460.21T). It was evident from his cross-examination that he read the position paper and understood it. Although he understood that his employment benefits were being calculated in the position paper on base salary plus bonuses, Mr Moore said his understanding was, "the St George policy was on base only" (461.45T). He said this more than once during cross-examination. He accepted that it was "most likely" that he did read both position papers.
[12]
The 2011 mediation
From a passage of cross-examination (505.50T - 508.14T), it was clear that Mr Moore had a good understanding of the issues in his case arising out of the exchange of position papers. He had a clear grasp of the components of his claim as set out in the schedule of damages. He well understood that there was a significant issue about whether any redundancy entitlement and any additional payment in lieu of notice which he claimed would be payable on a total remuneration basis rather than just base salary. He understood that Westpac denied the additional entitlement. He said that he and the other claimants believed that SGB bonuses were paid "on a guaranteed basis" (506.5T) because SGB salaries were less than other banks paid for comparable positions. He expected to recover something for each component but not in the amount claimed given the issue about the appropriate rate of remuneration. He was not expecting to recover "the bonus and the MTIP included at 100%" (507.25T).
He conferred with Mr Goot and Mr O'Dowd at 3:50 p.m. on 29 November 2011. Mr Gillis and Mr Collinge were also in attendance. Mr Collinge kept notes of the consultation and of the subsequent mediation on 1 December 2011 (Exhibit 3, pp. 297 - 303). No one questioned the accuracy of Mr Collinge's notes, so far as they go. When giving his evidence Mr Collinge struck me as a careful solicitor who was attempting to be accurate at all times. I regard his note as a reliable and relatively objective record of the matters recorded, I repeat, so far as they go.
The conference was a relatively short one during which senior counsel explained the procedure at mediation, discussed the secondment issue and expressed the view that Mr Moore had been effectively made redundant by SGB in December 2009. Mr Moore apparently pointed out that his grade had been misstated in the position paper and a note was made to amend that detail. When asked whether he had questions, Mr Moore said, "No". There was then a discussion about "settlement issues".
After the opening session of the mediation counsel appearing for Westpac approached Mr Moore's legal team and conveyed a request from Mr Ganesh Chandrasekkar, who was present to represent Westpac directly at the mediation, for a one on one meeting with Mr Moore. Counsel said, "I think it would be worthwhile for Stuart to hear what Ganesh has to say". After offering some advice about what had been suggested and the ramifications of it, Mr Goot asked Mr Moore whether he would be comfortable meeting Mr Chandrasekkar privately. It is common ground that Mr Moore was. They spoke for about 20 minutes. Mr Moore reported back to his legal team that Mr Chandrasekkar apologised for how Mr Moore had been treated, stated that his SGB position had been made redundant and acknowledged that he should have been paid a redundancy. Mr Moore reported that Mr Chandrasekkar said Westpac would offer him a full redundancy as well as payment of his unpaid bonus for 2008/2009. The conversation between Mr Moore and Mr Chandrasekkar, of course, took place under the cloak of confidentiality created by the entry of each participant into a confidentiality agreement for the purpose of the mediation.
[13]
The offer to compromise
On 2 December 2012 Westpac's solicitors served an offer to compromise under Rule 25.01 Federal Court Rules offering Mr Moore $600K in addition to costs as agreed or assessed open to be accepted for 14 days. Assuming Westpac were still working on the basis that they were prepared to allow $165K for Mr Moore's costs on a party and party basis, the offer translated into $765K inclusive of costs which was an increase of about $60K on the final offer made at mediation. Had Mr Moore been prepared to accept the offer, and assuming that his costs and disbursements on a solicitor and client basis remained in the vicinity of $200K, the offer would have put around $565K in his hand. This is $235K less than his last offer at mediation.
Although Mr Moore denies it, I accept the evidence of Mr Gillis (CB 1, tab 14, p. 245 [94]) that he telephoned Mr Moore at 2:23 p.m. on 2 December 2011 and spoke to him for 9 minutes about the offer of compromise. Unlike in Ms Lavars's case, there is no contemporaneous document raising any question about whether the offer of compromise had been discussed on that day. That Mr Gillis telephoned is supported by telephone records and I accept that he had a conversation with Mr Moore as he says. The obvious explanation is that Mr Moore has forgotten that detail because there is no file note or confirmatory letter in existence to which he could refer when preparing his affidavit which documented the conversation.
I am satisfied that during the conversation, the following exchange occurred between Mr Gillis and Mr Moore:
"Mr Gillis: [Mr Moore] Westpac have served an offer of compromise to you in the sum of $600,000 plus costs. As you know, they are allowing $165,000 for your costs at the mediation. They should make an increase in their offer for costs beyond the mediation.
Mr Moore: I won't accept $600,000 plus only a portion of my costs especially after what they put me through. I was earning over $600,000 a year so it is not even a year's pay."
It is not to the point that Mr Moore's earnings were not quite $600K, rather they were in the order of $550K (Exhibit 3, p. 304). But Mr Moore's rejection of the offer of compromise in those terms is consistent with the version of events I have accepted about Mr Moore's position in relation to settlement at the mediation. I fully accept a person may upon reflection change one's position but that does not appear to have occurred here. I interpolate, I am not quite sure why Mr Gillis might have thought Westpac would pay more for costs on the 2nd than they were prepared to pay on 1st December 2011.
[14]
The written advice of 13 December 2011
On 13 December 2011 Mr Gillis gave Mr Moore written advice in relation to the offer to compromise. As I have said, this written advice was the focus of Mr Moore's second claim. After reminding Mr Moore that his "final offer" expired at 4 p.m. on Friday 16 December 2011, Mr Gillis gave the following advice (Exhibit 3, p. 311; Exhibit CB 9, Tab 319, p. 2966):
"Please find attached an Offer of Compromise served by Westpac in your matter. Whilst the offer of compromise is substantially better than previous offers it is at the bottom end of the range to settle your case.
The offer of compromise is open for acceptance by you until 16 December 2011. The offer is made on a "plus costs" as agreed or assessed basis. We estimate this order would cover at least 80 - 90% of your actual costs. It is essentially the same offer they put at the mediation.
I am obliged to advise you the effect of the offer of compromise is that if you obtain a verdict less than Westpac have set out in the offer of compromise, you:
1. will not receive any more of your costs incurred beyond the date of the offer; and
2. will have to pay Westpac's costs incurred after the offer of compromise.
3. (This item was blank)
The Offer is within the range (albeit the bottom end of the range) if you were not on secondment. It is not in the range if you were on secondment and the court accepts your letter dated 23 December 2009 (sic) was an acceptance of new employment at Westpac. Either way the onus of proving your case remains with us.
The offer is open for acceptance for 1 hour after your offer has expired."
Some further information was provided about a directions hearing that day, and Mr Gillis's intentions in regard to further preparation.
There is an obvious inconsistency between the statements that the offer "is substantially better" and "it is essentially the same offer". However, Mr Moore was present at the mediation and may be taken to know what offers were made and how much from each he could expect to receive in his hand. Moreover, that he was not confused by this inconsistency is perhaps best illustrated by the consideration that he did not raise it with Mr Gillis.
Curiously, Mr Moore said that because the advice about the costs implications of the offer to compromise was preceded by the expression, "I am obliged to advise you" he didn't take it as important information. He said, "if it was something serious, he would have made a point of it, not doing it just under his obligation" (488.5 - .28T). Frankly, I would have thought the opposite. If a professional adviser prefaces information conveyed in a formal advice by saying, "I am duty bound to tell you" the ordinary reasonable reader would take notice and regard the information as important because it would be a breach of his or her duty for the professional adviser not to convey that information; that is, the information is being provided not as a matter of mere formality but because it is important information for the client to understand.
[15]
Summary of Mr Moore's argument on the second claim
Mr Gray and Mr Raftery who appeared for Mr Moore, in written submissions, emphasised the provisions of s 4(1) ACL that if a person makes a representation with respect to any future matter and the person does not have reasonable grounds for making the representation the representation is taken to be misleading. The onus of establishing reasonable grounds is upon the person making the representation.
It was argued on behalf of Mr Moore that in order for Mr Gillis to establish that he had reasonable grounds for making the representations contained in the written advice of 13 December 2011, in particular in relation to where the offer of compromise lay in the appropriate range for settlement, it was necessary for Mr Gillis to have addressed the prospects of success of each head of claim separately and by providing an individual range for each particular head of damage. Similar arguments were addressed in relation to the alternative claim in negligence. In particular, it was insufficient for there to be no more than a "binary" statement that there was a chance of winning or losing overall without breaking each issue down into its constituent parts. Counsel argued it was insufficient for a solicitor to say, "There are no certainties in litigation". Reasonable care required advice in detail on each separate issue. Once adequate advice about prospects had been given it was then necessary to give adequate advice about the proper range for settlement having regard to the assessment of prospects in the same detailed manner.
It was also argued that the general advice as to costs given in writing was insufficient and that Mr Moore should have been provided with either tax invoices, a full record of work in progress or "an accurate costs assessment". Unless the advice as to costs on both sides of the record was clear and accurate it was insufficient to equip a client to appreciate "the risks inherent in the case" to be run.
[16]
Summary of the defendant's submissions on the second claim
Mr Gyles SC and Ms Cameron for the law practice point out that the written advice does not contain any representation to the effect that the Westpac offer to compromise was unreasonable; Mr Moore was likely to obtain a better result by running the case; or it was in his best interest to reject the offer. Indeed, Mr Gillis did not make a recommendation one way or the other as to its acceptance or rejection.
It was emphasised that hindsight must be eschewed in considering whether Mr Gillis had reasonable grounds for making the representations contained in his written advice as to future matters. That the result was less favourable, even so considerably less favourable, than the offer of compromise does not prove that the advice was misleading or deceptive when given.
The law practice also argued that it was erroneous to take the written advice in isolation. It was part of a continuum of advice that had been provided especially during the intensive period of settlement negotiations from 1 December to 23 December 2011. The advice was based not only on Mr Gillis's own experience and expertise but also the advice of competent and experienced senior and junior counsel who had been briefed on Mr Moore's behalf. Both counsel attended the mediation and provided advice to the plaintiff in relation to prospects and the proper range for settlement. The advice provided on 13 December was consistent with the advice of counsel. Indeed, the offer to compromise was somewhat less than the final recommendation of Mr Goot at the mediation, vis $620K plus costs. And the offers that were put on behalf of Mr Moore were put on an "inclusive" basis to cover the totality of Mr Moore's solicitor and client costs.
It was argued that, in any event on the evidence, Mr Moore had not proved causation. Rather, Mr Moore having received advice had made his own decision about the minimum he was prepared to accept and the offer of compromise was more than $200K less than Mr Moore's minimum especially when one took into account the irrecoverable margin of solicitor and client costs over party and party costs.
[17]
The resolution of the second claim
As I have said, Mr Moore principally relies upon the statutory cause of action created by s 236 ACL for a contravention of s 18 concerned with misleading or deceptive conduct. By s 27 FTA the text of ACL is to be found in schedule 2 of the CCA, and by s 28 for the purpose of its application as a law of New South Wales it is referred to as the Australian Consumer Law (NSW).
By s 236 ACL if a person suffers loss or damage because of the conduct of another person and the conduct contravenes the provisions of Chapter 2, the first person may recover the amount of the loss or damage by an action against that other person. Section 18 ACL is to be found within Chapter 2. By s 18 ACL a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Under s 4 FTA the expression trading or commerce is defined to include any business or professional activity. In Kowalczuk v Accom Finance (2008) 77 NSWLR 205; [2008] NSWCA 343 ("Kowalczuk") at [328] - [351] it was held that this extended definition applied to solicitors. With respect it seems to me that this must clearly be correct.
In Kowalczuk (at [352]) McColl JA observed that, "there are various ways in which a solicitor might engage in misleading or deceptive conduct in the course of his or her professional activities". Somewhat delphically, her Honour added:
"Sometimes the task of a solicitor is to advise on the prospects of success of proposed litigation, or about how the courts are ultimately likely to decide some
presently undecided legal question. Such advice involves the solicitor making a prediction about the future and can be misleading or deceptive according to the same criteria as any prediction about what will happen in the future can be misleading or deceptive."
In accordance with the terms of the ACL, one way in which predictions about the future may be misleading is if they are not based on reasonable grounds.
Justice McColl also referred to the judgment of Malcolm AJA in Heydon v NRMA Limited (2000) 51 NSWLR 1; [2000] NSWCA 374 at [307], where his Honour said:
"A claim in damages for misleading or deceptive conduct is dependent on the effect or probable effect on the person to whom the conduct is directed, as distinct from any want of care or state of mind of the person engaging in the conduct: Yorke v Lucas (1985) 158 CLR 661. Where a legal adviser gives an opinion there is not ordinarily any representation or warranty that the opinion is correct, only that a reasonable degree of professional care and skill has been brought to bear on the formation and expression of the opinion: see the formulation of the duty in the joint judgment in Rogers v Whitaker, supra, at 483 per Mason CJ, Brennan, Dawson, Toohey and McHugh JJ. Where negligence and misleading or deceptive conduct are both pleaded based upon the same material facts, it is not uncommon for the result to be that they will succeed or fail together: Boland v Yates Property Corporation Pty Ltd, supra, at 229 per Gaudron J. The liability under s52 of the TP Act when read with s80 and s82 is not based on fault in the context of passing off: Parkdale Custom Built Furniture Pty Ltd v Puxu (1982) 149 CLR 191 at 197 per Gibbs CJ. The position is different in the context of a person called upon to give a professional opinion".
[18]
Causation
The principles of law governing the question of causation so far as the law of negligence is concerned are summarised in my principal judgment (at [22] - [24]). As I also observed (at [145]) in my principal judgment, causation for the purpose of the law of negligence has two elements. The first is factual causation under s 5D(1)(a) CLA. This test is satisfied if Mr Moore establishes on the balance of probabilities that but for the specific act or omission of Mr Gillis relied upon as constituting negligence, he would not have suffered the harm complained of, here economic loss. The second requires him to establish that the harm suffered falls within the scope of the liability for the purpose of s 5D(1)(b) CLA. This involves, in general terms, an inquiry, notwithstanding the establishment of factual causation, into whether or not and why legal responsibility for the harm involved should be imposed on the negligent party: s 5D(4). Given that the duty of care owed by a legal practitioner to his or her client is an established category recognised both by the law of negligence and in contract, had I been satisfied that Mr Gillis had been negligent, I would have had no real difficulty with the idea that the scope of his liability should extend to the economic loss suffered by Mr Moore: Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19 at [26].
The causation questions raised for the purpose of the statutory cause of action created by s 236 ACL are captured by asking whether Mr Moore suffered loss or damage because of the conduct of [the law practice] contravening, inter alia, s 18. The question of causation so connoted is not governed by s 5D CLA, notwithstanding the authorities I have referred to that deal with the factual overlap between the statutory cause of action and the negligence claim. However, in common with the law of negligence the question of causation posed by s 236 ACL is determined in retrospect. The focus is upon working out what happened and why for the purpose of the attribution of legal responsibility under s 236.
In Travel Compensation Fund v Tambree (2005) 224 CLR 627; [2005] HCA 69 ("Tambree") questions of causation in the context of FTA arose. The question of causation clearly involves a requirement of factual causation as established by the expression because of. However, the attribution of legal responsibility also involves the application of the normative considerations underpinning the statute. Gleeson CJ said (Tambree [29]):
"To acknowledge that, in appropriate circumstances, normative considerations have a role to play in judgments about issues of causation is not to invite judges to engage in value judgments at large. The relevant norms must be derived from legal principle. In this case, the primary task of the Court is to apply the legislative norms to be found in the [ACL], although the outcome is not materially different to applying the common law of negligence."
His Honour went on to say (at [30]) that the normative considerations are to be found in the purpose of the statute itself, a consideration of which will provide "the answer to the question of causation".
[19]
Mr Moore's third claim - the global offer
Mr Moore's third claim relates to the global offer made by Westpac on 15 December 2011, subject to the "one in, all in" stipulation. The facts pertinent to this claim are set out in my principal judgment (at [78] - [87]); the additional principles of law relating to aspects of Mr Moore's claim involving the question of breach of fiduciary duty are set out at [152] - [156]; and my conclusions of fact at [157] - [162]. My conclusions in relation to the claim in negligence relating to the global offer are set out at [164] - [169], and at [175] - [176]. Although the factual considerations dealt with in those passages make particular reference to Ms Lavars's position, and Mr Moore's claim is not identical, subject to one matter I will mention directly, those conclusions, bearing in mind all matters were heard together, apply equally and lead to the conclusion that this aspect of Mr Moore's claim fails.
The outstanding question relates to Mr Moore's claim that he was never informed of the global offer until 23 December 2011, 4 days after it expired (Exhibit 3, p. 92) and that accordingly, Mr Gillis rejected it so far as it concerned him without Mr Moore's instructions.
To briefly recap for context, at 8:53 a.m. on 15 December 2011, Westpac's solicitors emailed a letter to the law practice offering on behalf of Westpac to settle "all the applicants' claims" on the basis of listed inclusive of costs offers. It was, however, subject to what I have referred to as the "one in, all in" stipulation that "all other offers are accepted by the relevant applicant". The component nominated for Mr Moore was $850K inclusive of costs on an ETP basis and accordingly subject to income tax.
The component referrable to Mr Moore's claim, assuming that the law practice was still prepared to cap his costs at $200K would have cleared him $650K, had it been available for him to accept free of the stipulation, and had he been prepared to accept it. This would have represented an increase on the offer to compromise of $85K. The net amount was still $160K below Mr Moore's offer of 9 December 2011 in clear terms. It is not irrelevant to observe this was $30K more than Mr Goot's recommendation at mediation.
In Mr Moore's first affidavit (CB 1, tab 12, pp. 204 - 205 [51] - [53]), he states that the offer, so far as it was related to him was rejected without Mr Gillis consulting with, or taking instructions from, him. He also states (p. 207 [62] - [63]) that when he received an email from Mr Gillis on 23 December 2011 recording that Mr Moore had rejected the offer of $850K, he understood that to be a reference "to the offer of compromise with the costs added in, as I had no awareness until 2017 that Westpac had made a further offer to me subsequent to the offer of compromise".
[20]
Resolution of the third claim
The essence of the claimed breach of Mr Gillis's fiduciary obligation was a "conflict of duty and duty" among his remaining SGB clients, inter se. As I said (principal judgment [157]), "to say that some of the eight clients may have wished to accept the offer so far as it concerned them and others to reject it, is not the same thing as saying that their 'interests are in opposition' to one another". The eight clients had separate and unrelated interests in their personal causes of action against Westpac. There was no actual conflict between the duties owed by Mr Gillis to each client.
I reiterate (principal judgment [158]) "The global offer also cut across the careful strategy that Mr Gillis was attempting to pursue at that time". I do not accept there was any question of him acting both for and against any individual client. He was able to discharge his duty to advance the interests of each in relation to the global offer without impediment to his duty to advance the interests of the others in relation to it. As I have said he continued to strive to advance the interest of each individual client in negotiating with Westpac to achieve a satisfactory result. I accept that each client instructed Mr Gillis, as he says, to reject the offer so far as it concerned him or her. I have found that Mr Moore instructed Mr Gillis to reject the offer so far as it concerned him. For the reasons I explained fully (at principal judgment [160]) the suggestion that the law of fiduciary duty required Mr Gillis to advise each of the eight clients to instruct separate solicitors to obtain independent advice about the global offer was in truth completely unworkable. It provided no practical solution to any putative breach of fiduciary duty.
I am not satisfied that any breach of fiduciary in relation to the global offer has been established.
[21]
Negligence in relation to the global offer
I do not accept that Mr Gillis failed to advise Mr Moore of the global offer and take his instructions in relation to it. As I said in my principal judgment (at [164]), I can accept that it may be, in a sense, negligent for a solicitor, for example, to fail to inform a client of a relevant conflict or obtain informed consent to continue to act or recommend independent advice because the solicitor, through a want of reasonable care, has failed to recognise the conflict for himself or herself. I do not accept, however, that this occurred here.
As I explained in my principal judgment (at [169]) I do not regard Mr Gillis as having acted unreasonably in dealing with the global offer with the degree of celerity he brought to bear. This was not the first time he had spoken to Mr Moore or any other client about settlement. The global offer emerged during an ongoing process of advice, instruction and negotiation over the previous period of approximately two weeks. Not everything previously said about settlement had to be repeated. Each of the clients including Mr Moore was a banking executive and financially savvy. In any event Mr Moore, on the facts as I find them to be, rejected the component of the global offer referrable to him out of hand.
As I have said, Mr Gillis attempted to continue negotiations with Westpac's solicitor by having the "one in, all in" stipulation waived, by seeking to secure Westpac's in principle agreement to dealing with offers as damages rather than ETPs and seeking to encourage Westpac to continue negotiations by indicating that at least some of the offers were close to the mark. I repeat the conclusion expressed at [169] of my principal judgment:
"In my opinion Mr Gillis's approach was not bad or incorrect and was not negligent in that he continued to make his best endeavours to advance the interests of each of his clients including in the present context, Ms Lavars. None of their individual interests, as I have said, were in truth in conflict. In putting his own global offer, he was seeking to accommodate Westpac's desire for an all up settlement in response to an invitation from Westpac's solicitor. His conduct was in no way unreasonable."
I also accept that when the reinstated offers of 9 December 2011 expired at 4 p.m. on 16 December 2011 Mr Gillis spoke with Mr Moore about the offer to compromise and obtained instructions not to accept it. As I have pointed out above, Mr Moore was aware that he would have to make a quick decision about the offer of compromise ("to act or not to act") if the offers of 9 December 2011 were not accepted. Although Mr Moore gave evidence that he only rejected the offer of compromise on the basis of Mr Gillis's advice not to accept it (492.25 - .40T), I accept Mr Gillis's evidence that Mr Moore instructed him that he was not prepared to accept the offer of compromise. As I have been at pains to point out Mr Moore had in mind a figure of $800K clear.
[22]
Causation issues for Mr Moore's third claim
Lest I am wrong in my analysis of breach of fiduciary obligations and negligence in the context of the global offer, it is appropriate that I deal with the issue of causation. Given my findings about Mr Moore's position I am not satisfied that any breach by Mr Gillis of his fiduciary obligations or duty of care caused the economic loss suffered by Mr Moore. This is basically because Mr Moore had decided on a bottom line of $800K clear. In view of this there is no other step that Mr Gillis could have taken which would have at that time brought about a more favourable result. That is to say, Mr Moore is unlikely to have moved from his position and Westpac would not have increased its offer to that level. There was no intersection between their positions. Indeed, I am satisfied that, as Westpac's solicitor indicated to Mr Gillis (see principal judgment [85]), Westpac wanted all matters or none to settle. The increases in the individual components of the global offer over and above the offers of compromise were Westpac's attempt to achieve that purpose. They were prepared as it were, as it was put by counsel, to pay "a premium" to achieve that end. That Westpac would not to go further than the global offer is indicated by the circumstance that after its rejection it did not respond to any further offers put on behalf of any of the law practice's SGB clients, whatever its solicitor said in his second letter of 15 December 2011.
Causation in relation to Mr Moore's third claim has not been established.
[23]
Conclusions on liability
It follows that I am not satisfied that Mr Moore has made good any of his claims and a judgment must be entered for the legal practice.
The law practice also relied upon the statutory bar created by s 14 Limitation Act 1969 (NSW) in relation to the cause of action founded on the 2009 advice. It has also raised the partial defence of contributory negligence which I have dealt with in relation to Mr Moore's first claim at [59] above. Obviously given my findings on the liability question these matters do not arise except contingently. I am not satisfied that proceedings in relation to the December 2009 advice were commenced out of time. In my judgment, being a claim for damages for economic loss, the cause of action did not accrue until the entry of judgment by Griffiths J in the Federal Court on 27 March 2015. The proceedings obviously, were commenced within six years of that date.
Contributory negligence does not run as a defence to either the statutory cause of action under s 236 ACL or a claim for equitable compensation based upon Mr Gillis's alleged breach of fiduciary obligation.
There seems little point in dealing with the matter contingently for the negligence claims alone. The question of breach of fiduciary duty was the principal complaint about the global offer, although negligence was run as an alternative. The particulars of negligence really mirrored what were the particulars of fiduciary duty. So far as the written advice of 13 December 2011 is concerned, the matter was really principally propounded on the basis of misleading conduct to which the defence does not run.
To deal with contributory negligence contingently it is necessary to posit the putative negligence of the law practice for the purpose of making the required statutory comparison.
The law practice's liability in negligence for the written advice of 13 December is based upon Mr Gillis's failure to, at least, strongly recommend Mr Moore accept the offer of compromise. This assumption for these contingent findings does not depend upon the acceptance or rejection of Mr Moore's evidence. Rather it rests upon what learned counsel would say is an objective view of all of the facts. However, Mr Moore's case was not only did Mr Gillis not advise him in accordance with the standards observed by competent solicitors in the field on 13 December 2011, but categorically told him at the mediation not to reduce his offer of $800K clear. I rejected that evidence, but if that is assumed for the purpose of these contingent findings obviously it would be difficult to find, as between him and the law practice, that Mr Moore should have overridden Mr Gillis's advice and instructed him to accept the offer of compromise regardless.
[24]
Contingent findings as to quantum
As I remarked in my principal judgment, the parties agreed that after publication of my reasons, they should have the opportunity of either bringing in short minutes or addressing further on the quantum issues. Given my liability decision those steps will be unnecessary. Lest I am wrong about this, I will allow liberty to apply.
I have set out my views as to the preferred approach to assessment of economic loss in these matters at [203] - [217] of my principal judgment. I am of the view that a similar approach should be followed here. I have set out my contingent findings in relation to quantum of Mr Moore's first claim at [53] - [58] above. I will not revisit those matters.
I wish to acknowledge that counsel on both sides of the record have provided very detailed written submissions in relation to quantum. Mr Gray and Mr Raftery have also provided tables demonstrating the differences in approach of each side. Counsel have also worked to agree upon the amount of the various components which inform the final conclusion. They are not agreed as to how the figures should be utilised in assessing damages. I am grateful for their efforts.
As in Ms Lavars's case, I only propose to calculate the quantum I would have awarded had Mr Moore been successful on his second claim. And this is for the reasons I expressed at [214] and [218] of my principal judgment. This is essentially because I do not regard the global offer as an offer made to Mr Moore which was capable of acceptance by his unilateral act. At best it may have provided an opportunity for further negotiations, about which I am doubtful given Westpac's failure to in fact engage in any further negotiations whatsoever with any remaining SGB claimant. As in Ms Lavars's case, I would have considered that the assessment of any loss of a valuable opportunity to achieve a settlement at the time of the global offer would involve a Sellars discount of 40 percent.
According to the schedule prepared by Mr Gray and Mr Raftery, Mr Moore contends that the total of his economic loss resulting from the failure to accept the offer of compromise is $971,347.70. The total, or rather sub-total, of the law practice's calculations by reference to the same components as relied upon by Mr Moore is $775,849.94. The law practice submits that this sub-total should be subject to a Sellars discount of 50 percent and a reduction for contributory negligence of 20 percent bringing in a final figure of $310,339.98.
[25]
Orders
My orders are:
1. Judgment for each defendant as against the plaintiff.
2. The plaintiff to pay the defendants costs.
3. Liberty to apply on short notice.
[26]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 25 March 2022
On about 21 July 2009 Mr Moore consulted Mr Gillis because of his concerns about his continued employment security (CB 8, tab 279; p. 2695).
In early September 2009 Mr Moore received a "file note" from his superior at Westpac purporting to detail a number of discussions they had had about the work Mr Moore was performing at Westpac. It raised a number of concerns for him, including the assertion that he had been "directly appointed to the role … within Westpac" (Exhibit 3; p. 3). He consulted Mr Gillis on 17 September 2009 and Mr Gillis assisted by drafting a memorandum in response raising Mr Moore's concerns.
Mr Moore's concerns were not assuaged.
On 23 November 2009 he received a remuneration review which involved a substantial reduction in his previous remuneration from SGB. The combination of factors caused him to be concerned about whether he would be able to continue at Westpac. In general terms, Mr Moore was concerned about preserving his SGB redundancy entitlements if there was no position for him to return to at SGB at the imminent end of his secondment period. However, he did not wish to give up a paid position at Westpac as Ms Lavars had done as he was concerned about his immediate prospects on the financial sector employment market. The Global Financial Crisis was perhaps not irrelevant to his thinking. He, not unnaturally, was looking for a solution which would enable him to continue working on a salary but with continuing access to SGB's redundancy policy if he was forced out. Mr Gillis drafted a letter in an attempt to preserve his position which Mr Moore forwarded to his superior at Westpac on 26 November 2009. He received a letter on 30 November 2009 over the hand of Ginesh Chandrasekkar, "Acting Managing Director, People Westpac Institutional Bank" confirming that his employment with SGB was ongoing, asserting he had been "appointed" to the position of Proprietary Trader and directing him to continue to report to work at Westpac's offices.
In mid-December in conjunction with a performance counselling action plan for alleged under-performance SGB, over the signature of a human resources executive from Westpac, Mr Moore was offered "an ex-gratia termination payment" of about 6 months remuneration on his resignation and upon execution of a Deed of Release of the Bank from other entitlements that Mr Moore may claim. Mr Moore again consulted Mr Gillis who drafted a further letter to the human resources executive intended to be forwarded to her on 23 December 2019 by which Mr Moore re-asserted his status as a seconded employee of SGB, stated that as his SGB position no longer exists he had been made redundant and expressed a willingness to accept retrenchment from SGB by way of redundancy and reserving his rights in that regard. I infer, by way of protest he also stated:
"As a consequence of the attitude adopted by [SGB] in relation to my termination and redundancy entitlements, I find myself in the position where my financial obligation and family commitments required me to accept the offer of employment as Director [Foreign Exchange] Derivatives and Risk with [Westpac]. I would be pleased to receive a contract of employment in due course".
After some amendment by Mr Moore the letter was re-engrossed and delivered on 24 December 2009. By return on the same day Mr Chandrasekkar stated that Mr Moore's employment with SGB "is ongoing", his position had not been made redundant, there would be no new contract of employment and he should continue working at Westpac's premises when he returned from leave in the New Year.
Mr Moore resumed work at Westpac on 10 January 2010. There were further discussions with him about his alleged "underperformance" and his employment was terminated on 11 May 2010 with only 4 weeks salary in lieu of notice.
I have set these details out now for contextual purposes only. As I said in my principal judgment (at [13]), it is fundamental that questions of breach of duty be assessed prospectively as though the harm the subject of the proceedings had not occurred.
The law practice's position is that the December 2009 advice in relation to the preservation of Mr Moore's redundancy entitlements is subject to advocate's immunity. The relevant principles are stated in my principal judgment (particularly at [6]). The law practice says that the advice was intimately connected with the conduct of Mr Moore's proposed proceedings referred to in the 24 December 2009 letter. Secondly, the law practice says that it was not negligent in giving the advice impugned.
There is a substantial dispute about the content of the oral advice given on December 2009. Although questions of immunity logically precede questions of negligence, it is necessary to first establish the facts.
In his affidavit sworn on 16 May 2018 (CB 1, tab 12, p. 199 [17] - [24]), Mr Moore refers to a letter written on Mr Gillis's advice on 26 November 2009 (Exhibit 3, p. 122). It is addressed to his immediate supervisor at Westpac, Mr Edie and it follows the same pattern followed by Ms Lavars, successfully, in relation to her redundancy entitlements. Mr Moore refers to his secondment ending on 30 November 2009 and advises that he will be reporting for duty at SGB in its Treasury Division, 55 Market Street. He requests the provision of comparable and alternative employment as his previous position "is no longer active". This letter is referred to above (at [13]). It drew the response from Mr Chandrasekkar referred to. In his affidavit, Mr Moore does not give any evidence about any oral advice given in relation to sending the letter.
However, Mr Moore speaks generally about advice at the end of November 2009 (at affidavit [19]) in the following terms:
"Mr Moore: What should I do about the secondment coming to an end?
Mr Gillis: On 1 December you should stop working for [SGB]
Mr Moore: Is there another option?
Mr Gillis: The other way to do it is write them a letter advising them that you accept their repudiation of your contract and you will continue working as a Westpac employee.
Mr Moore: Will I still be entitled to my redundancy payment.
Mr Gillis: Yes, it won't change anything."
Mr Moore states that in reliance upon Mr Gillis's advice he conducted himself in the manner found by Griffiths J to constitute affirmation of his contract of employment with SGB.
Mr Moore's version of events is disputed by Mr Gillis. In his affidavit sworn on 22 June 2018 (CB 1, tab 14) he deposes to a number of conversations about the redundancy issue between the end of November 2009 and 23 December 2009. At the very least this must be correct, on the probabilities. There must have been more than one conversation, if only because there were two letters. (At affidavit [28]), Mr Gillis says that Mr Moore expressed unhappiness with his position and said, "I should be entitled to redundancy like everyone else". Mr Gillis pointed out to Mr Moore that he was on secondment and states that he advised him:
"The secondment policy that existed that you were placed on secondment requires [SGB] to return you to your original position before you went on secondment. As such my recommendation to you as to send a letter to Westpac saying that you will be returning to your old job in accordance with the [SGB] secondment policy. As your old job does not exist as the Treasury Division at [SGB] is essentially shut down you should then be entitled to a redundancy as [SGB] will not be able to place you in a comparable position."
Mr Gillis says that Mr Moore expressed "nervousness" about that approach because he still needed the income, but he agreed to send the letter of 26 November 2009 and to gauge SGB's response.
After receipt of Mr Chandrasekkar's response, Mr Gillis states that he had another conversation with Mr Moore on or around 1 December 2009. Mr Gillis says that he advised Mr Moore that by refusing to return him to his former position at the conclusion of the 12 months secondment SGB "have repudiated your contract of employment". He advised Mr Moore that he had to "elect whether or not [to] bring the contract to an end or stay with the current arrangements". If he chose to stay, he would be "agreeing to the variation". In response to a question from Mr Moore, Mr Gillis says he advised him he would need to act "within a week". Leaving was "the best way to ensure" Mr Moore would receive his redundancy. Mr Moore continued to express reluctance.
In the meantime, on or about 4 December 2009 Mr Moore consulted Mr Gillis about the proposed "exit arrangement" referred to above (at [14]) about which he had been sounded out by Mr Edie. I interpolate it was this issue which brought the matter to a head and resulted in the letter of 24 December 2009. After the offer was made, Mr Moore told Mr Gillis of it and expressed the view that the offer was insufficient as he expected his redundancy benefits would have been "at least 12 months' pay plus the bonus I should have received of $250,000". Mr Gillis states that he advised Mr Moore that he had until 22 December 2009, the date fixed by SGB for a response to the offer "to make a decision to leave or stay". Mr Gillis states that he told Mr Moore, "to best protect your redundancy entitlements you should leave".
He had a number of other conversations with Mr Moore around that time where Mr Gillis referred to Ms Lavars's situation and reiterated that to best protect his redundancy, Mr Moore had to leave "like [Ms Lavars] did". Importantly, Mr Gillis says he said (affidavit [36]):
"If you stay now you run the risk that you will have agreed to the changes to your contract."
Mr Moore said he needed the job and he was concerned about his ability to find another job quickly. Mr Gillis then says that he advised:
"If you're not prepared to leave which you are telling me, what we can do is draft a letter for you accepting [SGB's] repudiation of your contract and that you have brought it to an end. Once the contract is at an end it can't be revived. You will then in the letter acknowledge you are being directed by a Westpac employee to turn up to the Westpac office to do a Westpac job with a Westpac budget whilst at the same time being performance managed by Westpac employees pursuant to their Westpac standards. It's not the preferred option, but there is a very good argument that once you have terminated the SGB contract for their breach by not putting you back in your old job at the end of the secondment period, you'll be entitled to damages - those damages being your redundancy."
Mr Moore denies that there was any qualification to the advice given by Mr Gillis about the likely effectiveness of what I will refer to as the alternative strategy.
Mr Gillis does not have contemporaneous file notes to confirm the advice. But there is some support for his version in contemporaneous correspondence in as much as when he forwarded the draft which became the letter of 24 December 2009, Mr Gillis advised by email (Exhibit 3, p. 126):
"I confirm this is not the preferred approach to protecting your redundancy rights. However, it is by no means fatal. I understand your issues in doing this."
I infer that the reference to Mr Moore's "issues" is to his understandable desire to continue working for his salary given his family and financial commitments.
However, despite his misgivings about the treatment he was receiving at Westpac, his position was that he preferred to continue at work to draw a salary given his commitments. As I said in passing, this was entirely understandable.
The initial letter of 26 November 2008 to my mind confirms that Mr Gillis did advise Mr Moore from the outset that the best way of protecting his rights to a redundancy was to treat his secondment at an end in accordance with SGB's policy at the end of November 2009 and to attempt to return to his, albeit non-existent, position at SGB. Like Ms Lavars he may have been summarily dismissed, but this would have been the best way of protecting his position in financial terms, in Mr Gillis's opinion.
I find that Mr Moore was simply not prepared to take Mr Gillis's advice in that regard. I also accept that Mr Gillis advised him that taking the second option would provide a "very good argument", that he remained entitled to his redundancy, however, only if the Federal Court in due course accepted that the letter of 24 December 2009 did constitute an election to accept SGB's repudiation of the contract of employment and sue for damages. That the Court did not accept this argument in due course does not prove Mr Gillis's advice was negligently given. The matter has to be considered without the benefit of hindsight, that is wholly prospectively.
I also have difficulty accepting Mr Moore's evidence that he conducted himself in the manner in which Griffiths J found constituted an election to affirm his contract of employment in reliance on Mr Gillis's advice. This seems to me to be too heavily overladen with too much reconstruction to be accepted at face value.
While I accept that the email of 23 December 2009 is not well expressed in as much as Mr Gillis states taking the non-preferred approach "is not fatal", rather than "not necessarily fatal", to Mr Moore's claim for redundancy, I also accept that Mr Gillis was doing the best he could to "engineer" another way of protecting Mr Moore's position given his unpreparedness to give up his work.
In substance the advice was that the letter was not the preferred approach, but it should not necessarily be fatal to the claim. From this it was clear that there were risks involved in rejecting Mr Gillis's firm advice as to the preferred approach when it came to proof of his entitlement to a redundancy payment in court. The effect of Mr Gillis's "not fatal" advice was that the alternative strategy "engineered" by means of the letter did not render the claim for Mr Moore's redundancy payment "hopeless". I am not suggesting that Mr Gillis did not believe the alternative enjoyed good prospects of success, but it was clearly, in terms, a strategy inferior to the preferred approach. The preferred approach was the preferred legal approach. Mr Gillis was giving legal advice.
I do not accept that Mr Moore followed the course of conduct that constituted affirmation of his SGB contract of employment in the face of SGB's repudiation in reliance on Mr Gillis's advice. Quite apart from the legal effect of s 5D(3) Civil Liability Act 2002 (NSW) ("CLA"), as I have said, this is really reconstruction rather than accurate recall. The more probable position is that continuing to hold down a job was Mr Moore's preferred approach and he was unwilling to throw himself on the labour market for financial services at that time. Despite the pressure he was under from his Westpac superiors, he would have preferred secure, well-paid employment even to his redundancy entitlements. In truth, redundancy was his fall-back position. Had Mr Gillis advised him that the preferred approach was the only tenable approach, Mr Moore probably would not have voluntarily left his position at Westpac.
For these reasons I am of the view that looked at overall Mr Gillis's advice from November 2009 to 23 December 2009 did not fall short of the standards observed by competent solicitors in the employment law field. I am not satisfied that Mr Moore has proved negligence.
The law practice argued that any damages to which Mr Moore may be entitled should be reduced, first, by application of the principle discussed in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 ("Sellars") and secondly, for Mr Moore's contributory negligence in failing to accept Mr Gillis's advice that the "preferred approach" was for him to elect to accept SGB's repudiation of the contract of employment by leaving the position to which he had been assigned at Westpac and suing for damages.
On the Sellars principle (at p. 355) it is necessary for Mr Moore to prove on the balance of probabilities that he has sustained some loss or damage by reason of the law practice's negligence. It is sufficient for Mr Moore to show, to that standard, that he lost an opportunity of recovering damages of some value. The quantum of damages is then assessed "by reference to the degree of probabilities or possibilities" of the opportunity crystallising. The discount "conforms to the long-standing practice of taking into account contingencies in the assessment of damages" (Sellars at p. 356). However, here, to prove causation on the balance of probabilities, it is necessary for Mr Moore to establish that but for the putatively negligent advice, he would have acted in accordance with Mr Gillis's "preferred approach" and left his position at Westpac. Had that occurred, it can be said with confidence that his claim for damages in respect of his loss of redundancy benefits would have been successful. This can be said with confidence because it is known from the outcome of the Federal Court proceedings that Ms Lavars was successful in her claim for redundancy and she followed "the preferred approach".
Whether one approaches Mr Moore's case by treating facts proved on the balance of probabilities as certain for the purpose of the assessment of damages, or by saying his chance of recovery was "so high as to be practically certain - say over 99 percent" (Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20 at p. 643), it makes no sense to me to reduce the damages to which he may otherwise have been entitled to allow for a chance that either he would not have followed the advice or notwithstanding Ms Lavars's success he might have failed on evidence to the same effect.
It is also difficult to see why there should be some discount for contributory negligence. When making these contingent findings, I am necessarily proceeding on the (false) assumption that Mr Gillis did not in substance advise Mr Moore that failing to follow "the preferred approach" involved a "real risk" of failing on the redundancy head of damage before Griffiths J. If he were not so advised then he was unaware of the risk and, by his conduct, did not court it. It is, in any event, a large call to say a person with dependants and a range of family financial responsibilities should abandon well-paid work to better position himself to claim damages. If this does constitute contributory negligence, I would apportion fault between the parties: as to the law practice 100 percent; as to Mr Moore nil percent: cf s 5R CLA. The law practice has failed to establish contributory negligence.
In my judgment it is unnecessary to discount the assessment I have made contingently for those factors.
Although he had no actual recollection, he "most likely" read the statement in Westpac's position paper, "the Bank estimates legal costs of a trial of employees claims will exceed $2.5 million" and if the employees are unsuccessful "they will almost certainly be ordered to pay a substantial portion of the Bank's legal costs as well as their own legal costs" (462.35T - 463.10T).
He accepted that Mr Cranitch SC, Mr O'Dowd and Mr Gillis represented him at the mediation, but he had no recollection of them speaking to him and his wife, who was also present (463.35T). Mrs Moore did not give evidence.
Mr Gillis says (affidavit [43], CB 1, Tab 14, p. 236) that Mr Moore gave instructions to make an offer to Westpac in the sum of $1.2m inclusive of costs. He also says that Mr Cranitch said to Mr Moore:
"[Mr Moore] I think you have a very good case. But I have to tell you that I have lost cases I thought I would win, and I have won cases I thought I would lose. Litigation is a risky business and there is no certainty that you will win."
Mr Moore did not believe that conversation took place (464.15T). But he knew "litigation was a risk" and there was no certainty that he would win (464.20T). He did not recall any offer being put on his behalf until an offer to compromise was made on his behalf following the mediation.
I am satisfied that at least one offer was made at the mediation on behalf of Mr Moore. This is confirmed by a letter from Westpac's solicitors to the law practice rejecting "final offers" put on behalf of various SGB claimants at mediation including Mr Moore (Exhibit 3, p. 211). I am also satisfied that Mr Cranitch made the statement Mr Gillis attributes to him. This is the very type of advice that senior counsel is likely to give about the wisdom of compromise.
Mr Moore did accept that he discussed making an offer to compromise with Mr Gillis after the mediation. He seemed to accept that Mr Gillis informed him that Westpac had rejected his offer at mediation of $1.2m and advised him it was "worth making a formal offer of compromise which puts [Westpac] at risk in relation to costs" (465.8T). While he did not recall Mr Gillis giving advice concerning the costs implications of offers to compromise, he did not deny that the advice was given and accepted it possibly occurred.
I accept that Mr Gillis did explain that the advantage of an offer to compromise was that if Mr Moore did better than his offer to compromise, Westpac would have to pay all of his costs on an indemnity basis from the date of the offer (affidavit [46], CB 1, tab 14, p. 237).
Mr Moore denied that Mr Gillis advised him that he should put an offer to compromise which is "close to your lowest figure you would accept" (affidavit [46], CB 1, tab 14, p. 237); (465.45T). Mr Moore said that Mr Gillis "always recommended a number and I would agree with him" (465.50T). He denied that he had instructed Mr Gillis, "the offer should be the same as the offer I made at mediation". The offer to compromise was in the sum of $1.18m. This was effectively the offer that had been made at mediation, but clear of costs. At mediation, bearing in mind that Mr Moore's proceedings had only just commenced, Mr Gillis had assessed Mr Moore's costs at $24,000.
I find it difficult to accept that Mr Moore was an entirely passive participant in the negotiation process. Certainly, he was entitled to receive advice about settlement in accordance with the principles I discussed in my principal judgment (at [14] - [21]). At the same time Mr Moore was an experienced banker. Among other areas he worked in foreign exchange derivatives. He was familiar with his total remuneration package and his entitlements. And, quite properly, was astute when working for SGB and at Westpac to query the human resources department when he believed his entitlements had not been satisfied. He knew the proceedings were about his unpaid entitlements of which he had a good understanding. He later clarified that he was "ultimately making the decision based on [Mr Gillis's] advice. I would ask him and discuss it with him" (487.45T). This is what one would expect, applying the aphorism, "the lawyer advises, the client decides".
The offer to compromise under Order 23, Rule 2 of the former Federal Court Rules was served on 3 June 2010. In response, Westpac made a Calderbank offer on 10 June 2010 in the sum of $185,000 plus costs on a party and party basis.
After a direct approach to Mr Gillis from an executive at Westpac in November 2010 further offers were put on behalf of all claimants including $1.3m inclusive of costs on behalf of Mr Moore. I infer this represents no real change in his position other than to take account of increasing costs. Offers were subsequently made in December 2010 to certain claimants not including Mr Moore (or any of the other plaintiffs).
In February 2011, Mr Gillis advised Mr Moore that he had had a consultation with Mr Robert Goot SC who advised in consultation, "there was good prospect for an award for exemplary damages". Mr Goot was considering quantum over the next few days (Exhibit 3, p. 232). An amended statement of claim, inter alia raising the claim for exemplary damages was filed in or about May 2011.
The question of mediation arose again in mid-2011. There was some delay due to procedural issues in the Federal Court and agreeing upon a suitable mediator. On 24 October 2011, Mr Gillis advised Mr Moore that the Honourable Tony Fitzgerald QC had been appointed as mediator and the mediations would occur "sequentially" over two to three days in early December (Exhibit 3, p. 265). Mr Moore's mediation was fixed for 1 December 2011 at 2 p.m.. Mr Goot and Mr O'Dowd were briefed to represent him. Copies of the respective position papers and an updated schedule of damages were provided to Mr Moore under cover of Mr Gillis's email of 28 November 2011.
Mr Moore's schedule of damages was much like that prepared for the May 2010 mediation. It included unpaid annual incentive for 2008-09, the value of his unpaid MTIP in respect of the unissued shares for 2008-09, the pro-rata bonus and the MTIP to 30 November 2009 when it was alleged Westpac repudiated his contract of employment, five months' salary in lieu of notice, his retention incentive, his redundancy entitlement, interest, exemplary damages and costs and disbursements assessed at $205,000. Payment in lieu of notice and the redundancy were calculated on the basis of total remuneration being salary and additional entitlements.
The Westpac position paper, a copy of which was provided to Mr Moore, disputed the secondment policy applied to him because he was appointed to a permanent position albeit of indefinite duration at Westpac. Westpac disputed an entitlement to reasonable notice as claimed arguing four weeks' notice was Mr Moore's contractual entitlement and in the alternative, he could not have both payment in lieu of notice and redundancy. Westpac denied that Mr Moore had an entitlement to unpaid bonuses and that other entitlements should be calculated upon gross earnings rather than base salary. The RIP was disputed on the basis the EPS had not been met. Westpac argued that the total of the claimed additional period of notice of five months and the RIP, which were the only matters it conceded were arguable, was less than the Calderbank offer in the sum of $185,000 plus costs. Westpac also contended that as Mr Moore had been assessed as "not fully competent", he was not entitled to the claimed unpaid bonuses.
Mr Moore agreed that he received his and Westpac's position papers and he "most likely" read them (473.33T). I infer that he did read the position papers and I infer that he understood the issues between the parties in relation to his claim.
Following the meeting between Mr Chandrasekkar and Mr Moore, Westpac offered the sum of $600,000 inclusive of costs. This offer was conveyed by the mediator who explained that Westpac had calculated the offer by allowing a sum of $383,000 representing Mr Moore's entitlement to a redundancy and an additional four months' notice, both at his base salary. Westpac were prepared to allow interest at 8.25%, a total of $430K and $165K for costs on a party and party basis. These components totalled $595K which Westpac rounded up to $600K.
On Mr Gillis's account (affidavit, CB 1, p. 243), at Mr Goot's request, Mr Gillis explained the position in relation to costs. He did so by referring to the schedule of damages, of which Mr Moore had a copy, which showed the figure for costs and disbursements as $205K. Mr Gillis said he could probably trim costs to $190K. Mr Gillis explained the difference between party and party costs and solicitor and client costs and reminded Mr Moore of the advice he had previously given of the effect of an offer to compromise. Mr Gillis also said the party and party costs are "usually around 70 - 80% of your actual costs".
Mr Gillis says that the plaintiff referred to his conversation with Mr Chandrasekkar and stated that he "wanted" his full redundancy calculated on a total remuneration basis and 60% of the balance of his claim. He asserted this was the formula used to settle the other SGB cases. Mr Goot declined to comment upon the results in other cases. He advised Mr Moore whatever Mr Chandrasekkar had said in the mediation was confidential and could not be used in court. Westpac's formal position was to deny that Mr Moore had been made redundant. Mr Gillis said that Mr Moore maintained his position as to his expectations after receiving this advice.
According to Mr Collinge's note an offer of $1.048m inclusive of costs was put on behalf of Mr Moore. This was $848K plus costs of $200K. This offer was based upon the recommendation of Mr Goot. It appears to have been calculated on the basis of $430K, the aggregate of Mr Moore's redundancy on a total remuneration basis and $418K for 50% of the balance of Mr Moore's claims. Obviously, Mr Moore must have accepted Mr Goot's recommendation in this regard, even if it was somewhat less generous than the formula Mr Gillis said Mr Moore propounded.
Mr Collinge records that Westpac responded with an offer of $675K inclusive of costs, still working on the basis of $165K for party and party costs. As it happens this was about 80% of Mr Moore's solicitor and client costs of $205K.
Mr Goot then recommended a figure of $620K plus costs. According to Mr Collinge's summary, Mr Goot explained that this was 50% of the whole of Mr Moore's claim as articulated in his schedule of damages, excluding any component for exemplary damages. I interpolate, as explained in my principal judgment, Westpac had made it clear they were not prepared to countenance any component in any settlement for exemplary damages. While it appears that all claimants accepted that, it was hoped by the legal team that the existence of the claim, which they all believed was well-justified, would operate as a lever for settlement. After receiving the benefit of Mr Goot's advice, Mr Collinge records that Mr Moore said, "[I] don't really want to take less than $800K clear of costs. Put $800K plus costs". An offer was then put on behalf of Mr Moore of $1m inclusive of costs. Westpac's final offer at mediation was $705K inclusive of costs. It was explained to Mr Moore that this would clear him $500K after the deduction of $205K for solicitor and client costs.
In his affidavit, Mr Gillis simply says in general terms that negotiations continued with instructions being provided by Mr Moore and the final offer made by him was $800K plus costs; the final offer by Westpac being $705K inclusive of costs. Given the sequence of events recorded in Mr Collinge's notes, I would infer that Westpac's final offer was rejected by Mr Moore. Mr Gillis says that despite Mr Goot's recommendations, Mr Moore stated "he did not want to accept any amount less than $800K clear of his costs". Mr Gillis also states (CB 1, tab 14, p. 244 [92] - [93]) that Westpac's counsel had informed Mr Goot and him that Westpac claimed their costs were greater than Mr Moore's and that information was passed on to Mr Moore.
Mr Moore's account of how he came to reject Mr Goot's advice, is starkly different from the evidence I have recited. Perhaps understandably Mr Moore had no real recall of the consultation with senior and junior counsel before the mediation. In his affidavit sworn on 16 May 2018 (CB 1, tab 12, p. 203 [40]) he gives a very brief or potted account of the mediation stating, "no settlements were achieved" (obviously a reference to all remaining claimants) and that Westpac's best offer to him was in the sum of $580K plus costs. I observe this does not tally with Mr Collinge's contemporaneous note. Mr Moore added:
"I did not accept this offer based on Gillis' (sic) advice to me to the effect of "don't take it they'll go higher". Gillis did not discuss with me the prospects that I might be unsuccessful in the proceedings or what the consequences of that would be. My counter-offer to Westpac at the mediation on Gillis' (sic) advice was in the sum of $810,000 plus costs".
Again, Mr Moore's recollection of his last offer does not tally with the note.
In a subsequent affidavit sworn on 27 July 2018, after service of the affidavits on behalf of the law practice, Mr Moore stated (CB 1, tab 16, p. 262 [10] - [11]), after Westpac had increased its offer to $675K, Mr Gillis said "their offer is not good enough. We'll get more out of them." While he accepted that either Mr Goot or Mr O'Dowd "did say some words to me about considering my downside and lowering my offer" he denied that they explained in practical terms the risk of a near ruinous outcome.
He also said that after receiving that advice from counsel, Mr Gillis took him outside of their breakout room and spoke to him alone saying words to the effect of "don't go lower [on my settlement offer]. I know what the others are getting, and I am sure that Westpac are going to improve their offer." Mr Moore says that he and Mr Gillis then returned to the breakout room and the following exchange occurred:
"Mr Moore: I am going to stay at $810,000 plus costs based on Michael's … advice.
Counsel: Why won't you lower your offer. I think you need to come down.
Mr Moore: Michael … told me not to because he knows what the others have gotten and what I'll end up getting.
Counsel to Mr Gillis: Do you know what other people have been getting?
Mr Gillis: Yes and [Mr Moore] shouldn't go lower.
Counsel: I suppose then there's no point in sticking around and continuing the mediation."
Mr Moore says he then left the mediation. In a third affidavit sworn on 1 August 2019, Mr Moore clarified that the barrister referred to in exchange was Mr Goot, not Mr O'Dowd (CB 1, tab 19 [12]).
In cross-examination Mr Moore recalled that Mr Goot had recommended to him that he should make a lower offer. But he could not remember Mr Goot mentioning a figure of $620K plus costs or him mentioning, that "was 50 percent of [Mr Moore's] claim" (479.19T). He said (at 479.40 - .50T):
"I explained to Mr Goot why I wasn't prepared to lower my offer and that's when Mr Gillis took me out of the room and we went one on one out to the foyer area and Michael told me that he ‑ not to lower my offer. He knew what the others had settled for and that Westpac would go ‑ would pay that amount of money, so not to lower it. So, I conveyed that to Mr Goot when I went back into the room with Michael ‑ Mr Gillis."
When it was put to him that that account was something he had made up, he responded, "it is 100% true" (480.1T).
While Mr Moore's claim is focused on the offer of compromise of 2 December 2011 and the advice that was given about it on 13 December 2011, it is necessary in my opinion to consider all of the evidence in relation to the whole of the advice Mr Moore received not only from Mr Gillis but also from Counsel and Mr Collinge. Naturally if Mr Gillis told him in unequivocal terms not to accept less than $800K clear of costs that may be a significant issue in the evaluation of the written advice subsequently given.
In a supplementary affidavit sworn on 15 July 2019 (CB 1, tab 17, p. 276 [13]), Mr Gillis denies telling Mr Moore not to accept less than $800K clear. In his supplementary affidavit sworn on 18 July 2019, Mr Collinge denies that Mr Gillis advised Mr Moore not to accept less than $800K plus costs in settlement, at least in his presence (CB 1, tab 18, p. 279 [5] and [7]). Mr O'Dowd's affidavit of 22 June 2018 (CB 1, tab 15, p. 254) is silent on the topic, but is to the effect that he advised Mr Moore that he should consider accepting Westpac's final offer at mediation and that he gave advice about the costs ramifications of any formal offer of compromise that may be made subsequently ([14]). Mr O'Dowd said that he advised Mr Moore that the offer was in the range for settlement and should be "seriously" considered ([16]).
Importantly, although Mr Collinge's note is not comprehensive, he did make a note of key developments in the mediation. There is no suggestion of Mr Gillis taking Mr Moore outside, effectively behind the back of everyone else, to give critical advice about settlement. It may not be a large factor, but the foyer of the office of the opposition solicitors is likely to be a public place where one would not ordinarily give a client such critical advice about settlement. In his note, after recording Mr Goot's recommendation about an offer of $620K, Mr Collinge directly quotes Mr Moore rejecting that advice and stating his bottom line. To my mind this is very significant contemporaneous evidence.
Accepting that the exchange of written evidence in advance is an important consideration, it is not unimportant that neither Mr Gillis, Mr Collinge nor Mr O'Dowd were cross-examined to suggest that Mr Moore's account about being taken aside was correct, and their contrary evidence incorrect.
In his first affidavit, Mr Collinge states that after Westpac offered Mr Moore $675K inclusive of costs he was concerned that Mr Moore should properly understand the potential risks involved in rejecting such an offer (CB 1, tab 13, p. 224 [41]). Mr Collinge says that Mr Gillis pointed out that Mr Moore's case was different from the others and he couldn't compare what others were offered with his offer. Mr Collinge says Mr Gillis advised Mr Moore, "They're effectively giving you your redundancy plus most of your costs. That's pretty good".
Mr Collinge says that he advised Mr Moore:
"[Mr Moore], you need to think very carefully about what you do here. There are no guarantees in litigation, and whilst we all think you have a good case, there is no certainty that you will win at the end of the day or win on all your claims. When Westpac turns this offer into an offer of compromise that will put you at risk of having to pay all their costs - not just recoverable costs - from that day onwards if you don't beat the offer of compromise. (Original emphasis)
If your case is unsuccessful, then as well as you own costs, you will be up for their costs as well. All that could easily be more than they're offering you now."
Mr Collinge says that Mr O'Dowd "was even more blunt". He advised Mr Moore that accepting the offer obviates the risk of an adverse costs order. Mr Collinge said that Mr O'Dowd said, "You're putting your home and all your assets at risk for what is a relatively small difference". Notwithstanding this advice Mr Moore reiterated that he did not wish to accept less than $800K.
Mr Gillis said that after Westpac's solicitors had indicated they intended to convert their final offer into an offer to compromise, Mr Goot advised Mr Moore:
"The effect of the offer of compromise is that if you do not beat the offer made by Westpac in their offer of compromise you will not be entitled to any of your costs after the date of the offer even if you win and you will have to (pay) Westpac's costs from the date of the offer. You have already incurred around $200,000 in costs to date. Your own costs to get to the end of a hearing in April next year will be at least that again. Westpac's will be the same".
In cross-examination Mr Moore agreed that he had "a strong belief in December 2011" that "something like $850,000" was "a solid claim", "if the case had to run and we were successful" (506.45T - 507.5T). He did not have an expectation greater than that because he was not "expecting to get the bonus and the MTIP included at 100 percent" (507.25T).
It is also important to bear in mind that Mr Moore had been in ongoing contact with Ms Lavars, Ms Murphy, Mr Wittenberg and Mr Lawson by voice call or text. He knew that they had not settled and that ultimately, they were not accepting the offers of compromise that had been made to them. He was prepared to accept that they were "all hanging tough at this stage" (510.5 - .15T), although that was not how he would have expressed it himself, I infer. He had exchanged a large number of text messages with the other remaining plaintiffs through 29 November 2011 to 1 December 2011. He wanted to know if the others were accepting their offers because if they were that would have been an encouragement for him to accept his (510.25 - .41T). It is also not irrelevant that he was "carrying significant animosity toward Westpac at that stage" (512.10T). However, he maintained he declined to accept Mr Goot's advice on Mr Gillis's advice (512.13T).
It is also relevant to consider Mr Gillis's evidence (CB 1, p. 248 [107]) that he contacted Mr Moore again on or about 20 December 2011 advising, "[W]e should have another crack at settlement". Mr Gillis advised that Westpac would not pay "$800,000 plus [Mr Moore's] costs". Mr Gillis says Mr Moore said that he did not want to change his position. Mr Moore was to contact Mr Gillis if he changed his mind. While Mr Moore denies this conversation occurred (CB 1, tab 16 p. 271 [62], Affidavit 27 July 2018), in his letter of 21 December 2011 to Westpac's solicitors conveying further offers on behalf of other clients (Exhibit 1, p. 233) Mr Gillis states, "I am still awaiting instructions from [Mr] Moore which I expect to obtain later today." This statement is more consistent with Mr Gillis's evidence than Mr Moore's. It also supports the conclusion that "$800K plus costs" was Mr Moore's own figure.
I am not persuaded that on the balance of probabilities Mr Gillis took Mr Moore aside and in effect advised him to reject senior counsel's advice about settlement at the mediation. I am not persuaded that Mr Gillis told Mr Moore not to go lower, that Westpac would go higher, and he knew what others were getting. I interpolate none of the people at mediation in November/December 2011 were settling their cases. And I do not accept that Mr Gillis was prepared to disclose, contrary to what would have been confidential agreements, let alone the constraints of legal professional privilege, what other clients had accepted at the end of 2010.
I am certainly prepared to accept that Mr Gillis was bullish about Mr Moore's prospects in the sense he was confident about prospects if the case ran and exuded that confidence. Obviously, that in turn would have engendered confidence in Mr Moore. Nor is it unusual for a solicitor to have a different view about settlement from even senior counsel. Naturally, a client may have greater confidence in the solicitor he has chosen to represent him than in counsel whom she or he may only have met recently. However, from the whole of the material I have referred to, I am not persuaded that Mr Gillis was prepared to overstep the mark between "advising" and "deciding". Moreover, I am not persuaded Mr Gillis would have cut out the other members of the legal team when advising Mr Moore. If he had a contrary view, he is the type of person who would have been happy to express it openly within the confines of the break-out room. I accept what Mr Collinge said about the advice given by Mr Gillis at mediation which supports and corroborates Mr Gillis's own account which I also accept.
I am positively persuaded that $800K was Mr Moore's own figure arrived at after receiving advice from all members of his legal team including Mr Gillis. It was not a bottom line imposed on him by Mr Gillis. I am reluctant to find that Mr Moore "made up" this part of his evidence. The phenomenon of the corruption of "human memory" as explained by McClelland CJ in Eq in Watson v Foxman (2000) 49 NSWLR 315 at 319 is the more likely explanation for what I regard as Mr Moore's erroneous account.
As I recounted in my principal judgment (at [61] - [72]), being aware that Westpac intended to serve offers to compromise under the rules after the mediations had been unsuccessful, Mr Gillis conceived of a strategy of attempting to secure a better offer for each client by putting individual offers on behalf of each client at the same time to give Westpac the opportunity to finalise all claims at once without having to incur the further cost of running any. As I said in my principal judgment (at [68]), that this would appeal to Westpac may have arisen from something Westpac's solicitor said to him or he may have been perspicacious in this regard.
In his affidavit (CB 1, tab 14, p. 245 [95]), Mr Gillis gives evidence that he telephoned Mr Moore on around 6 or 7 December 2011 to further discuss settlement with him. It is possible the conversation took place after the final mediations on 8 December 2011, which were also unsuccessful. Mr Gillis said the following exchange occurred or at least in words to the following effect:
"Mr Gillis: I want to make an offer on your behalf and on behalf of all other claimants that will expire at 4 p.m. on 16 December 2011. We will put it to Westpac that it's a final offer which will then allow Westpac to accept any or all of the offers and bring the proceedings to an end. If your offer is not accepted by Westpac you still have time on 16 December 2011 to accept the offer of compromise.
Mr Moore: Ok I understand. Please put the sum of $810,000 plus costs to Westpac with the offer expiring at 4 p.m, on 16 December.
Mr Gillis: We will cap your costs at $200,000 for the purpose of this offer.
Mr Moore: Ok."
Having spoken to each of his clients, Mr Gillis sent a letter dated 9 December 2011 (Exhibit 3, p. 308) making an offer in each case including an offer in the sum of $1.01m for Mr Moore on an ETP basis. Each offer was expressed to be open for acceptance by Westpac until 4 p.m. on 16 December 2011.
Mr Moore takes issue with Mr Gillis's account. He acknowledges he had discussed with Mr Gillis making an offer of $810K plus costs in writing at the mediation but says he had not given instruction to Mr Gillis to reject the offer of compromise or to make any other counter-offer to it. I repeat that on his account he was not aware of the offer of compromise as at 9 December 2011.
At 5:39 p.m. on 9 December 2011 Mr Gillis emailed Mr Moore confirming that he had made "a final offer for your today … as discussed with you in the sum of $810,000 plus costs … on an EPT basis" (486.20T). Mr Moore (CB 1, tab 12, p. 204 [47]) says that he had not discussed putting the "counter offer", in any event he points out the letter did not refer to a final offer and it was put on an inclusive of costs basis. Mr Moore was reluctant for an offer to be put on an "inclusive" basis because he was desirous of Westpac knowing what figure he was looking for (486.20T). If there was to be a dispute about costs that could be sorted out separately.
Leaving aside the last point, I do not accept that Mr Gillis acted without Mr Moore's instructions. I am satisfied that Mr Gillis was punctilious in obtaining instructions from each of his SGB clients before putting any offers of settlement. There was no evidence whatsoever that Mr Moore made any protest when he received the email of 9 December 2011 (Exhibit 3, p. 310). I prefer Mr Gillis's account.
As I have said, Mr Gillis's strategy was to put better offers on behalf of each of his clients, framed to expire just before the expiration of Westpac's offer to compromise in each case to allow each client, including Mr Moore, the opportunity of accepting the offer of compromise if so minded before it in turn expired.
Upon receipt of the written advice Mr Moore says he telephoned Mr Gillis and had a conversation to the following effect (CB 1, tab 12, p. 204 [49]):
"Mr Moore: Should I accept the $600,000 plus costs offer?
Mr Gillis: No don't accept it. Our offer is open until an hour before there's expires so let's see what happens."
Mr Moore says he was given no advice about the risk of failure or the consequences of failure. He believed on the basis of the advice he'd previously received "there was no prospect of losing" and his costs would be paid by Westpac.
In his affidavit of 22 June 2018 (CB 1, tab 14, p. 246 [98]) Mr Gillis states that he did not have any telephonic communication with Mr Moore about the written advice. On this detail I find that Mr Moore is probably correct. He may well have telephoned Mr Gillis on 13 December 2011. While it seems unlikely that he would have asked Mr Gillis whether he should accept the offer to compromise given what had previously transpired especially at the mediation, it does seem probable, given the strategy that Mr Gillis had attempted to put in place to obtain a better offer for Mr Moore, that he would have said something to the effect of the words Mr Moore attributes to him. When the conversation took place, the offer of compromise had not expired. The clear implication of the statement is not to accept the offer of compromise yet but to follow the strategy that Mr Gillis had already put in place and explained to each of his clients. Part of that strategy was considering acceptance, or rejection, of the offer to compromise only if Westpac rejected the offers of 9 December 2011. This would be a matter for each client to consider individually only then.
In his further supplementary affidavit of 28 July 2019 Mr Gillis set out the basis of the reasoning behind his formulation of where the offer to compromise fell in the range in the written advice. In summary he relied upon his own experience as a solicitor working in employment related disputes, the understanding of Mr Moore's instructions as to the circumstances of his employment at SGB, Westpac's position paper setting out the issues, the schedule of damages (leaving aside the allowance for exemplary damages) prepared as part of Mr Moore's position paper for the mediation which had been prepared in consultation with and settled by senior counsel, and the views of the various counsel who had been involved in the preparation of Mr Moore's case while it was pending, including the consideration that none of the counsel involved had expressed the view that the case was unlikely to succeed or the settlement range formulated was unsupportable or unrealistic.
Considering those matters, Mr Gillis was of the opinion that the range for settlement for Mr Moore's claim was:
1. if not on secondment in the range $550K to $700K plus costs; and
2. if on secondment, in the range of $700K to $1m plus costs.
Mr Gillis was of the view that Mr Moore had good prospects of success in the case and had "the better side of the argument on the secondment issue".
As I have already remarked, there is no doubt that Mr Gillis was confident about Mr Moore's prospects, and he exuded that confidence. He had advised Mr Moore at various times orally that he had a strong case, it was Mr Gillis's expectation that Westpac would settle, and if they did, they would pay his costs. Mr Gillis's views about the "range" reflected those beliefs.
Justice Malcolm also said (at [330]):
"The giving of legal advice may imply a representation by the adviser that the advice is based upon the knowledge, experience or expertise of the adviser, or to which the adviser has had access. Much will depend on the context and the circumstances. As I have already observed, the duty of the legal adviser is to bring to the task the exercise of reasonable care and skill, so that, in the particular circumstances of a case such as this, a decision on the issue of negligence will determine the outcome of the claim [for misleading or deceptive conduct]."
In Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209; [1999] HCA 64, Gaudron J (at [104]) observed that it is not uncommon for a case to be determined on the basis that the outcome of the negligence claim will determine the outcome of the statutory claim. However, her Honour pointed out that where the statute applies it would exclude the general law of negligence given that liability and damages for conduct in contravention of s 18 ACL depends simply on contravention of the provision and resulting loss. "It is not confined by those considerations that determine liability in negligence" ([105]).
It needs to be borne in mind that what is called into question here is a matter of the expression of a professional opinion based upon an assessment of Mr Moore's prospects of success in the Federal Court. This is not a case where some salient or established fact known to Mr Gillis is said to have been misstated. Perfect foresight is an entirely unattainable standard given that all litigation is by nature "inescapably chancy": Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 725. Another way of expressing the same idea is that the outcome of litigation is inherently uncertain. This is why for the purpose of s 18 ACL complete accuracy of forecast is not the legal standard required by the statute. All that can be required is an honest statement of a belief genuinely held on reasonable grounds. The expression reasonable grounds imports an objective standard. It is not sufficient only that the grounds appear reasonable to the person making the representation.
Moreover, in assessing whether advice about the range for settlement, necessarily based upon an assessment of the prospect of a successful outcome, is misleading, one must look at all the circumstances of the case including all of the advice given about settlement not only by Mr Gillis but also by Mr Moore's other legal advisers. It is wrong to focus simply on the content of the written advice of 13 December 2011. Doubtless this wider context includes the bullish advice that Mr Gillis gave from time to time to the effect that Mr Moore had a good case, Westpac would probably settle and if so, it would pay Mr Moore's costs. But a client in Mr Moore's position could not expect from this that Westpac would settle at any cost. He well understood a process of negotiation was involved and that each party to the negotiation may have a point beyond which that party was not prepared to go. Only if those points at least intersected would settlement be achieved.
I am satisfied that the opinions expressed by Mr Gillis were genuinely held on reasonable grounds which included each of the matters he referred to in his affidavit of 29 July 2011. I do not accept, as I have said, that Mr Gillis advised Mr Moore not to accept anything less than $800K. I am left with the strong impression that Mr Gillis while exuding confidence about Mr Moore's prospects left the decision about settlement to him, as is appropriate. Mr Moore was a sophisticated and experienced banking executive. Even allowing for the consideration that he had not been directly involved in litigation previously, he understood numbers and had a good understanding of his employment entitlements. Working, inter alia, in the foreign exchange area, he must have had a sound appreciation of the interaction between risk and reward.
In my view learned Counsel for Mr Moore have raised the bar too high in respect of the detail which is required when a legal practitioner advises about the appropriate range for settlement. Advice is rarely given all at once and it is necessary to consider the whole of the established relevant circumstances. From the whole of the evidence, it is obvious that Mr Moore was given advice about: the content and components of his claims; the issues as perceived by Westpac; and the views of senior counsel in respect of settlement, including that he should settle for a figure which represented about 50 percent of the employment-benefit components of his claim without any allowance for exemplary damages. I do not accept that it was necessary for the law practice to provide a detailed breakdown of costs incurred and estimated to be incurred in the future for both parties. What was said at the mediation was appropriate and sufficient. Mr Moore was given, albeit global, advice about the amount of his costs to date, a general estimate of future costs and information about what Westpac's solicitors said about its costs.
As I have said, I accept that Mr Gillis formed his opinion as to prospects on the basis of the factors to which he referred. That his advice proved erroneous in the event does not mean it was misleading when it was given. In dealing with representations concerning future matters, whether the statute has been contravened must be determined at the time the representation is made and the question of reasonable grounds must likewise be determined prospectively on the basis of the information then to hand.
The type of forecast required to formulate the type of advice in question in this case falls into a category where reasonable minds may reasonably differ. Doubtless another lawyer might have been less bullish about prospects than Mr Gillis. Perhaps Senior Counsel was less bullish. But this consideration does not prove that Mr Gillis's advice was wrong or misleading when it was given.
Bearing in mind that the law practice bears the onus in relation to reasonable grounds, I am not satisfied that Mr Moore has established an entitlement to damages under s 236 of the ACL. That is to say I am not satisfied that he has proved that the advice of 13 December 2011 was misleading when it was given.
Nor am I satisfied that Mr Gillis's opinion was negligently formed. Once again it proved wrong in the event. However, that it was incorrect in that sense does not of itself mean that the advice was negligently given. Questions of breach of duty of care must be determined prospectively. I am not satisfied on the balance of probabilities that the written advice was given negligently for the same reasons I have rehearsed in relation to the statutory cause of action, bearing in mind the passages from Boland v Yates to which I have referred. That another lawyer may have given different advice about the range for settlement does not of itself give rise to or affect the law practice's liability for negligence: s 5C CLA.
The misleading conduct in question need not be the sole cause of the relevant loss. Gleeson CJ said (at [32]):
"Misrepresentation will rarely be the sole cause of loss. If, in reliance on information, a person acts, or fails to act, in a certain manner, the loss or damage may flow directly from the act or omission, and only indirectly from the making of the representation. Where the reliance involves undertaking a risk, and information is provided for the purpose of inducing such reliance, then if misleading or deceptive conduct takes the form of participating in providing false information, and the very risk against which protection is sought materialises, it is consistent with the purpose of the statute to treat the loss as resulting from the misleading conduct." (Footnotes omitted.)
To the extent to which the causation question raised by the statute may require a consideration of the proper scope of liability it is to be resolved by reference to the normative standards informing the statutory subject, scope and purpose. No question of the making of an individual value judgment is involved.
For the purpose of these contingent findings on causation it is necessary to bear in mind, as I have said repeatedly, that the focus of Mr Moore's case is upon the written advice of 13 December 2011 and not on the other factors, even though I have held that the written advice cannot be divorced from the context of the advice already given, especially in the recent past, so far as settlement is concerned. In essence Mr Moore's case, both for contravention of s 18 ACL and in negligence, is that had Mr Gillis complied with s 18, on the one hand, and exercised reasonable care, on the other, Mr Gillis would have advised him that Mr Moore's prospects of complete success in the Federal Court proceedings were no better than "poor to middling" - my expression not counsel's - and that the offer to compromise was in an amount that would very likely exceed judgment eventually recovered. A strong recommendation that Mr Moore accept the offer should have been made.
For the purpose of s 236 ACL Mr Moore said I should draw the inference that he relied upon Mr Gillis's misleading advice when deciding to reject the offer to compromise and because of the contravention of s 18 ACL suffered the economic loss involved in the loss of the opportunity to obtain a much more favourable outcome by acceptance of the offer to compromise. It needs to be borne in mind that reliance upon misleading conduct need only be one, of more than one, concurrent cause of an "imprudent decision" to reject the offer to compromise: Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [14]. Frequently a plaintiff's "imprudent decision" will be the direct cause, and the misrepresentation only an indirect cause, of the plaintiff's loss. However, even then the contravention of s 18 "is a link - not a break - in the chain of causation": Sellars at [356] - [357]. For the purpose of these contingent findings, unless it can be said that Mr Moore has not proved that he relied on the written advice of 13 December 2011 when he instructed Mr Gillis to reject the offer to compromise such that his own "imprudent decision" was the sole cause of the loss, causation for the purpose of s 236 ACL would have been established.
I think it important to bear in mind that at the mediation Mr Moore himself made it clear that he was not prepared to accept less than $800K clear of costs. This was in circumstances where: Mr Goot SC was recommending a counter-offer of $620K plus costs (say $820K); according to Mr Collinge, Mr Gillis had said Westpac's final offer was "pretty good"; Mr Collinge was counselling caution; and Mr O'Dowd said he could "lose his house". It also needs to be borne in mind, as I have already pointed out, that Mr Moore was an experienced banking executive, familiar with even complex financial transactions, and understood risk. The offer of compromise was, in net terms, $235K less than his bottom line. Had he received the advice from Mr Gillis that his counsel contend should have been given, Mr Moore may have been surprised, if not suspicious, given the air of confidence previously exuded by Mr Gillis in what he had said and what he had done. When told of the offer of compromise, and notwithstanding it was an increase on the last offer made by Westpac at mediation, he reiterated his instructions as to his bottom line.
In all of these circumstances, I am not satisfied on the balance of probabilities that had the written advice of 13 December 2011 been to the effect contended for, Mr Moore would have accepted it. I am not satisfied that he has established causation for the purpose of s 236 ACL.
The same factual considerations inform a decision about causation for the purpose of s 5D CLA. Again, it is not necessary that the negligence of the law practice be the sole cause of Mr Moore's loss. But the same factual considerations establish in my mind that had the written advice of 13 December 2011 been in the terms contended for, Mr Moore has not established that he would have accepted it and acted on it.
In his first affidavit (CB 1, tab 14, pp. 246 - 7 at [100]), Mr Gillis states that he telephoned Mr Moore at 9:05 a.m. on 15 December 2011 and spoke to him for six minutes about the global offer. During that conversation he informed Mr Moore, "Westpac had made a new offer to all of our clients". Mr Gillis made mention of the "one in, all in" stipulation and he informed Mr Moore that he had already spoken to one client, Mr Moore's call was the second call of the morning, who had rejected the offer. He informed Mr Moore that his component was $850K inclusive of costs. Mr Gillis said that Mr Moore told him that he would not and did not accept that offer. Mr Gillis then suggested restatement of the offer made on 9 December 2011, which advice Mr Moore accepted.
That Mr Gillis made a call to Mr Moore at 9:05 a.m. on 15 December 2011, is established by his telephone records (Exhibit 3, p. 319). I am satisfied that Mr Gillis did speak to Mr Moore at that time about the global offer. Apart from anything else, Mr Gillis's telephoned records demonstrate that he spoke to each of his SGB clients who had outstanding claims against Westpac before rejecting the global offer at 9:52 a.m.
In cross-examination Mr Moore was prepared to accept that Mr Gillis's telephone records were accurate (489.15T). He agreed that a conversation took place and he had no records to disprove that (489.20T). He was not prepared to accept that he may have forgotten the conversation. He was adamant that Mr Gillis had not mentioned the global offer that day (489.35T). Interestingly, the only conversation Mr Moore recalled around that time was Mr Gillis advising that the offers of compromise were expiring and that Mr Moore should think about it because he needed to be prepared to act on the offers "or not act" (489.50T - 490.5T).
I accept Mr Gillis's evidence that he telephoned Mr Moore at 9:05 a.m. on 15 December 2011 and spoke to him in the terms he deposes to in his affidavit. I accept that Mr Moore instructed Mr Gillis that he would not accept an offer of $850K. This is consistent with Mr Moore's previous and subsequent position. The circumstances to which I have referred also establish that the apparent logic of events is that Mr Gillis did speak to Mr Moore about the global offer and that Mr Moore rejected it. There was no other reason for Mr Gillis contacting Mr Moore at that time on that day about 45 minutes before he emailed Westpac's solicitors rejecting the global offer.
It is also important to bear in mind, as I set out at [85] of my principal judgment, after sending his email at 9:52 a.m. rejecting the global offer, Mr Gillis telephoned Westpac's solicitor in an attempt to have the "one in, all in" condition removed. It is doubtful, however, whether Mr Moore's component was one of the components "getting close to the mark". In response to Westpac's solicitor's suggestion that Mr Gillis put "a global lump sum", Mr Gillis converted the individual offers of 9 December 2011 into "a global figure of $6.48M". As I have set out at [86] of the principal judgment that drew a rebuke from Westpac's solicitor, although he stated that "Westpac is prepared to consider any reasonable offer". In this regard, it should be noted that I have accepted Mr Gillis's evidence that he attempted to obtain further instructions from Mr Moore on or about 20 December 2011 for a figure less than that put on Mr Moore's behalf on 9 December 2011, but Mr Moore did not give those instructions.
The evidence in Mr Moore's case also indicates that other efforts were made by Mr Gillis on 15 December 2011 to bring about a settlement. Apart from emailing Westpac's solicitor at 9:52 a.m. rejecting the global offer and reinstating the offers of 9 December 2011, Mr Gillis sought to reach an agreement that any settlement achieved "be paid as damages without attracting any tax liability". Obviously, this would have made even the offers put by Westpac more attractive to the clients of the law practice. Westpac's solicitor responded at 10:05 a.m. asking for an outline of the advice Mr Gillis had received for consideration. Westpac's solicitor also said:
"We will take instructions on your reinstated offer. However, it is unlikely that we will be able to respond within the timeframe you have imposed, for the reasons discussed yesterday."
Obviously, Westpac's solicitor and Mr Gillis had spoken about the cases on 14 December 2011 but there is no evidence of the content of that conversation. Mr Gillis responded by providing the requested outline of the tax advice he had received indicating how any settlement could be paid as damages rather than as the recovery of claimed employment benefits. The significance of these matters for present purposes is that Mr Gillis continued to strive to obtain a favourable settlement for each of his clients.
In the event the offers of 9 December 2011 expired at 4 p.m. on Friday 16 December 2011 without Westpac expressly responding or requesting an extension of time to give the matter further consideration.
I am also conscious of the consideration that Mr Moore rejected Mr Goot SC's advice to reduce his demands. Mr Moore says he did so on the basis of Mr Gillis's advice. Again, where a client receives conflicting advice from counsel and his solicitor it is difficult to say the client failed to exercise reasonable care in his own financial interests by accepting the advice of the experienced solicitor who had been handling his case throughout. On this contingent basis I am not satisfied that contributory negligence had been established.
For the reasons I gave in my principal judgment, I am not of the view that a claim based upon the failure to accept the offer of compromise should be subject to a Sellars discount. That offer was on the table and was capable of acceptance by 5 p.m. on 16 December 2011. For Mr Moore to prove some loss resulting from the defendant's misleading conduct or negligence he needs to establish on the balance of probabilities that Westpac would have made the offer - it already had - and that he would have accepted it. On this basis there's no occasion for making a Sellars discount. And I have already explained why I would not make a reduction for contributory negligence.
I frankly have a little difficulty following the methodology proposed by counsel. To my mind, the approach I propounded in my principal judgment is preferred. The starting point, of course, is the amount of the offer of compromise of $600,000. It is necessary to deduct from this sum the amounts of the judgments obtained by Mr Moore in the Federal Court. As I set out at [19] above, the total of the judgments of 2 April 2012 and the 27 March 2015 is $154,317.96. It is necessary to deduct from the offer the amount of solicitor and client costs over party and party costs that Mr Moore would have had to pay to the law practice for work done up until his acceptance of the offer to compromise. I am not persuaded that had he accepted the offer of compromise that he would have gone to assessment of either party and party costs payable by Westpac or his own solicitor and client costs. Obviously, the principal idea of a settlement from a client's point of view is to wrap the case up "now" to achieve a level of certainty. Both expedition and certainty are sacrificed if costs have to be assessed. Westpac was prepared to pay $165K for party and party costs and the law practice was prepared to accept $200K for solicitor and client costs, a difference of $35K. Omitting the cents, the total to be deducted is $189,317, leaving a difference of $410,683.
As the Federal Court judgment was less favourable in the offer of compromise, on any basis, Mr Moore recovered his costs up until 6 December 2011 and was ordered to pay Westpac's costs on an indemnity basis thereafter. Those costs included the costs of the appeal of $82,302, which for the reasons I gave in my principal judgment I would not have been inclined to allow because I did not regard them as a loss that flowed from the negligence of the law practice whether as reasonable costs of mitigation or otherwise. It really was a question of throwing good money after bad.
Westpac's costs of the trial on an indemnity basis were assessed at $449,677. Mr Moore's current lawyers were able to settle these costs by negotiating a discount of 30 percent on his behalf. The matter is a little complicated in as much as a two-level settlement was negotiated. On the one hand, a deed of acknowledgment was entered into giving effect to the 30 percent discount. On the other, a deed of settlement was entered into giving a greater discount on the basis that the current litigation settled at mediation. Westpac, in those circumstances, were prepared to accept less to obtain a sum certain in a timely manner. As the conditions to which the Deed of Settlement were subject were not fulfilled, I think it appropriate to proceed on the basis of the amount contained in the Deed of Acknowledgment, at least for the trial costs.
The law practice made a detailed argument about the reasonableness of the settlement. That is to say, it argued that Mr Moore agreed to pay too much in settlement of the costs. I am not of the view that that argument should be accepted. It seems to me that Mr Moore engaged apparently competent lawyers to obtain the best available negotiated settlement in relation to costs from Westpac. From his point of view, and as between him and the law practice for this contingent assessment of damages, I regard the settlement as reasonable. Excluding the cents, the amount of $314,773 is to be added to Mr Moore's damages.
It was also agreed that Mr Moore paid the sum of $152,013 to the law practice after 6 December 2011 and I would allow that figure as part of Mr Moore's damages.
The law practice had also assessed the costs and disbursements due to them on a solicitor and client basis after 6 December 2011 which have not yet been paid. As I understand it, the certificate of assessment has yet to be filed as a judgment. On this basis, the law practice argues that liability has not crystallised and any additional amount due to the law practice over and above the sum already paid cannot be dealt with as damages. Mr Moore agrees, but argues a declaration could be made that the law practice is not entitled to recover any shortfall from Mr Moore. And this is doubtless one of the topics upon which the parties wished to address had Mr Moore been successful. I am satisfied that some order should have been made to finalise the proceedings and to quell all issues in dispute. It is not necessary to fashion that order now.
Accordingly, the components of damages I would have awarded may be calculated as follows:
Economic loss, being the difference between offer of
compromise and the judgment amounts recovered: $410,683
Mr Moore's liability to Westpac for 70% of its trial
Costs on an indemnity basis after 6 December 2011 $314,773
Costs paid to the law practice after 6 December 2011
Which would not have been incurred but for its breach $152,013
________
$877,469