Morris v Trodden

Judgment

1. The plaintiff, Karen Morris, by Statement of Claim filed on 24 April 2014, claims damages from the defendant, a solicitor, in respect of a property in East Balmain which was the former matrimonial home of the plaintiff and Mr Mark Morris.
2. The defendant has applied for an order dismissing the proceedings or an order striking the proceedings out. The consideration of the application in this judgment necessarily proceeds upon the basis of the allegations of fact made by the plaintiff in the Statement of Claim, and on the limited evidence adduced at the hearing of the application.
3. Mr Morris had been registered as the sole proprietor of the East Balmain property, he having acquired it following a transfer of title on 16 December 2005.
4. Mr and Mrs Morris separated on or about 22 March 2007. In the Statement of Claim it is pleaded that on or about that date they attended on the defendant for the purpose of causing the property to be transferred into the names of Mark and Karen Morris as joint tenants. The plaintiff alleges that Mr Trodden was retained on that date.
5. On the same date, according to the Statement of Claim, the plaintiff executed an application for exemption from stamp duty and provided that document to the defendant. The transfer was executed on the same occasion.
6. The plaintiff's case is that after the transfer was executed for the plaintiff and Mr Morris to become joint tenants, the defendant held the copy of the Certificate of Title for the property until a later date when it was provided by him to the National Australia Bank ("NAB") in circumstances discussed below.
7. The plaintiff alleges that the defendant failed to register the transfer and failed to lodge the application for exemption from stamp duty.
8. The plaintiff also alleges that Mr Morris approached the defendant on or about 3 March 2008 and told him to provide the Certificate of Title and other documents to the NAB in relation to a loan transaction with the bank. The evidence indicates that Mr Morris had, in December 2007, received loan funds from NAB under an "all monies" mortgage.
9. The East Balmain property as security for the proposed loan transaction then became subject to a mortgage registered on 3 March 2008 in favour of NAB securing loans made to Mr Morris.
10. The plaintiff in the Statement of Claim states that she was aware of the loan transaction: at [12].
11. The plaintiff alleges that subsequently the East Balmain property became the subject of further loan and mortgage transactions without her knowledge. This appears to be a reference to certain drawdowns made after 3 March 2008.
12. On 30 June 2010, the defendant solicitor registered a caveat over the property on behalf of the plaintiff. The plaintiff states in her Statement of Claim that she paid to the defendant fees and charges in respect of the caveat being lodged.
13. The plaintiff pleads causes of action in negligence and in contract for alleged breach of duty or retainer by the defendant solicitor in failing to provide competent legal services in respect of the transfer, NAB loan/mortgage and registration of the caveat. She also pleads a cause of action for alleged misleading and deceptive conduct for which relief is claimed pursuant to s 18 of the Australian Consumer Law, which is contained in Schedule 2 to the Competition and Consumer Act 2010.
14. The pleaded duty of care in the defendant is alleged by the plaintiff to have arisen on 22 March 2007 and to have continued thereafter.

Notice of Motion

1. The defendant filed a Notice of Motion on 10 April 2015 in which he seeks an order for the summary dismissal of the proceedings pursuant to Rule 13.4 of the UCPR 2005 or alternatively an order that the proceedings be struck out pursuant to Rule 14.28 of the UCPR.
2. The Notice of Motion was supported by the affidavit of Steven Mark Lurie, solicitor, affirmed 24 April 2015.
3. Exhibited to the affidavit and marked SML-1 is a folder of documents. The folder includes correspondence and the following documents: 22.3.07 Exemption from Duty Tab 4 22.3.07 Transfer: Mr Morris (Transferor), Mr and Mrs Morris (Transferees) as Joint Tenants Tab 4 20.12.07 NAB Facility ($360,258) Tab 7 20.12.07 Mortgage - Mr Morris (Mortgagor) Tab 4 3.3.08 Historical Search on Certificate of Title (registration date of mortgage on 3.3.08) 25.3.08 Letter NAB to Mr Morris re changes to Facility Tab 14 1.7.10 Copy letter DTA Lawyers to Mrs Morris Tab 14

Summary Chronology of Events

1. For convenience I set out a chronological summary of some of the material events. SUMMARY CHRONOLOGY OF EVENTS

2007 22.3.07 Plaintiff and former husband (Mr Morris) allegedly retain defendant solicitor to register transfer of title from Mr Morris to Mr and Mrs Morris as joint tenants 27.12.07 Partial drawdown of NAB loan $468,049.67

2008 28.2.08 Partial drawdown $229,296 (total drawn as at 28.2.08 = $883,318.87 3.3.08 Mr Morris allegedly instructs defendant to provide various documents, including Certificate of Title, to National Australia Bank (NAB) to allow it to register mortgage to secure monies advanced to him 3.3.08 NAB mortgage registered.

2010 1.7.10 Letter from the defendant to the plaintiff confirming a caveat lodged on title for the plaintiff. Letter states "we will continue to pursue registration of the Transfer"

2012 27.7.12 Sale of East Balmain property for $5,675,000 - proceeds paid to NAB account $4,257,781.24

1. The documents in Exhibit SML-1 include Account Balance Summaries in relation to Mr Morris' account recording, inter alia, drawdowns in the years 2007-2008: Tabs 8-12.

Particulars of Retainer

1. The defendant's solicitors requested particulars of allegations made in the Statement of Claim. On the question of the alleged retainer the particulars provided on behalf of the plaintiff by letter dated 2 March 2015 were: 1. That the retainer was entered into on or about 22 March 2007 at the defendant's office. The persons present were stated to be the plaintiff, Mr Morris and the defendant solicitor. 2. That the plaintiff and Mr Morris on that occasion provided instructions to the defendant for the plaintiff's principal place of residence Folio Identifier XXX being the property known as XXX Balmain East to be transferred from the sole name of Mr Morris into the joint names of Mr and Mrs Morris. The defendant, it is alleged, agreed to act on those instructions.
2. As to the terms of the retainer, in the letter sent on the plaintiff's behalf on 2 March 2015 it was stated: "…. It was an implied term that the instructions would be acted on. It was an implied term that the instructions would be acted on promptly or within a reasonable period of time. It was a further implied term that the instructions would be carried out competently and diligently, other implied terms are particularised in paragraph 25(a) to (j) of the Statement of Claim."
3. In relation to paragraph [9] of the Statement of Claim, the particulars stated that the Certificate of Title was provided to the defendant during the meeting of 22 March 2007.
4. The letter of particulars on page 2 asserts that in or around December 2007, Mr Morris instructed the defendant to provide the Certificate of Title to the NAB for the purpose of registering a mortgage instrument.
5. The letter identified a mortgage to NAB by registration number in respect of a loan in the sum of $1,250,000. The letter supplying particulars stated that further loans were provided as detailed on page 3 of the letter.
6. In respect of paragraph [18] of the Statement of Claim the letter of particulars stated that the property was sold for $5,675,000.
7. In relation to paragraph [20] of the Statement of Claim, in the letter of particulars, it was stated: "[39] The representations were false in that no steps were taken by the defendant to register the transfer, or to the extent steps were taken they were not successful. The defendant made those representations knowing that no steps were being taken to successfully register the transfer. The plaintiff relied on those representations and took no further action to protect her interest in the property. In the premises the representations were false and in relying on the representations, our client was misled and deceived."
8. In relation to paragraph [22] of the Statement of Claim, the letter of particulars stated: "The property was sold for $5,675,000. From that amount, the NAB was entitled to receive $1,225,726.62 pursuant to mortgage ADXXX. Had the NAB only received that amount, our client would have received $4,449,273.38 from the proceeds of sale of the property."
9. It was stated that NAB had in fact received the sum of $4,257,781.24 from the proceeds of the property, an amount that it allegedly would not have received but for the defendant's negligence. As such, the plaintiff claimed she suffered loss no less than $3,032,054.62.
10. The letter stated on page 5 that the plaintiff continues to suffer loss relating to interest and legal fees.

Applicant/Defendant's Submissions

1. Mr A Cheshire of counsel, who appeared on the application on behalf of the defendant, relied upon his written Outline of Submissions dated 18 May 2015 supplemented by his further submissions at the hearing on 25 May 2015.
2. The written submissions contended that the causes of action pleaded in tort, contract and pursuant to the Australian Consumer Law were statute‑barred by reason of the expiration of the limitation period of six years: s 14 Limitation Act 1969. It was acknowledged by the defendant that damage has to be actual and measurable as opposed to prospective or negligible. It was submitted that it was irrelevant that the plaintiff may have been unaware of the true position, including as to negligence or damage.
3. The submission for the plaintiff, it was noted, was that the effect of the failure to register the transfer was that the plaintiff's interest in the property was diminished by the registration of NAB's mortgage, which secured the loans to her husband over the entire property.
4. As to the plaintiff's complaint that by reason of the defendant's negligence the plaintiff "got significantly less than it should have done", in that on 22 March 2007 the plaintiff had an unregistered, rather than a registered, interest, it was submitted for the applicant/defendant, that such loss (in effect arising upon registration of the mortgage) "constituted damage" and completed the tort and as such, time commenced running from that point. As discussed below, reliance was placed upon dicta of Mason P in Winnote Pty Ltd v Page [2006] NSWCA 287; (2006) 68 NSWLR 531 at [60] and also Taluja v Orford [2014] NSWSC 714.
5. In oral submissions, Mr Cheshire stated that once the NAB registered its mortgage on 3 March 2008 that registration effectively precluded registration of the transfer. The plaintiff's loss or damage was said by the defendant to have arisen on the registration of the NAB mortgage.
6. It was submitted that regardless of whether the breach of duty was seen as having occurred at the outset, when the defendant failed to give the plaintiff "a bundle of rights" to which she was entitled by failing to register the transfer, or, at a later point, as a breach of a continuing duty, the fact is that the cause of action accrued on 3 March 2008 when the NAB mortgage was registered. The defendant submitted therefore that the action was statute-barred as at the time the proceedings were commenced in 2014: T 25 May 2015: p 3.
7. It was further submitted for the defendant that in any event, there were further drawdowns on the various mortgages available to NAB resulting in further "diminishment" of the plaintiff's interest over time: T 4.
8. Mr Cheshire's contention was that potentially there existed a two-stage process in relation to the diminution of the plaintiff's interest. First, diminution by virtue of the registration of the mortgage which operated as a first security. The very act of registering a mortgage, it was submitted, was, of itself, a loss or resulted in loss to the plaintiff. Second, in any event, given that there were further drawdowns on the mortgage. Accordingly, the amounts secured by the mortgage increased thereafter and prior to 24 April 2008.
9. Further, it was submitted that even if the loss at the time of the failure to register the transfer is analysed as a "chance of a loss" rather than a "loss of a chance", the contingency of a dealing being registered ((here, the NAB's mortgage securing initial debts and further monies thereafter) before the plaintiff's interest in the property had been registered in fact occurred, thereby completing the cause of action prior to 24 April 2008, more than six years prior to the commencement of the proceedings on 24 April 2014.
10. In relation to the cause of action in contract, it was observed in the defendant's submissions that this arose upon breach and that the suffering of actual damage does not extend the time. The cause of action became barred six years after breach pursuant to s 14 of the Limitation Act: Defendant's Written Submissions at [10].
11. It was also submitted for the defendant that, as with the claim in tort, the alleged breach of the contract was the failure to register the transfer on 22 March 2007 or soon after. In any event, any damage alleged by the plaintiff was said to have occurred by the registration of the NAB mortgage and/or the securing of further monies by that mortgage prior to 24 April 2008. Again, it was submitted on that basis the six year period had elapsed: Defendant's Written Submissions at [11].
12. In relation to the claim based on misleading and deceptive conduct under the Australian Consumer Law (or, more properly the defendant submitted, the Trade Practices Act), it was submitted for the defendant that this cause of action was also complete upon the suffering of damage and was subject to a six-year limitation period. Accordingly it was now statute barred. On a separate point, reference was made to the decision in Pollock v Hicks [2015] NSWCA 122 at [37] to [38] for the proposition that the transitional provisions maintained the relevant provisions of the Trade Practices Act for the purposes of the claim in the present case: Defendant's Written Submissions at [12].

The Issue as to Defective Pleading

1. It was submitted for the defendant that the Statement of Claim was embarrassing. It did not set out the facts material to the matters required to be proved and did not satisfy the requirements of the Civil Procedure Act 2002 in relation to: 1. The scope and duration of the retainer; 2. The duty of care; 3. How the defendant's conduct is alleged to have been misleading and deceptive; 4. How s 52 of the Trade Practices Act 1974 is alleged to have applied to the defendant given that he is not a corporation; 5. Causation of fact and law; and 6. Loss and damage suffered.
2. It was argued that the deficiencies in the pleading could not be remedied by particulars.
3. It was argued that the Statement of Claim must accordingly be struck out by reason of the defects in the pleadings. In any event, the result of the analysis on limitation, it was submitted, indicated that the proceedings must be dismissed: Defendant's Written Submissions at [25].

Respondent/Plaintiff's Submissions

1. The respondent/plaintiff, Mrs Morris, relied on written submissions of Mr Eardley of counsel dated 24 May 2015 and his submissions made on her behalf at the hearing.
2. The contention advanced on her behalf was in essence that there was a continuing duty of care owed to the plaintiff by the defendant solicitor that was breached by him and that the last 'action' giving rise to a cause of action occurred on 1 July 2010. The offending conduct, it was argued, commenced on 22 March 2007 but continued up until 1 July 2010 at which point the defendant is alleged to have represented that he would take certain steps which he had failed to take earlier. The plaintiff did not seek to extend the limitation period for its claim but rather argued that it was not time-barred because the relevant date was 1 July 2010, that being the date on which the defendant sent a letter to the plaintiff stating that a caveat had been placed on the property on her behalf and that the defendant would 'continue to pursue' registration of her interest: Plaintiff's Outline of Submissions at [42].
3. In relation to the claim by the defendant/applicant that the pleadings were embarrassing and should be struck out, it was contended in the written submissions for the plaintiff that the Court would not consider this to be the case and that if it were found otherwise, the pleading could be cured by amendment. It was submitted that there was no other basis for the Statement of Claim to be struck out: Plaintiff's Outline of Submissions at [8]-[10].
4. In oral submissions a concession was made that re-pleading was necessary. In his oral submissions made on 25 May 2015, insofar as there existed defects in or criticisms of the way the case was pleaded in the Statement of Claim, Mr Eardley acknowledged that paragraphs [14] and [21], in particular, of the Statement of Claim will require re‑pleading: T 18:40-45.

Legal Principles and Argument

1. In his submissions, Mr Cheshire, as earlier noted, referred and relied upon a number of authorities including, in particular, the judgment of Mason P in Winnote, supra, and the well-known decision in Forster v Outred & Co [1982] 1 WLR 86. Reference was also made to the case of Taluja v Orford, supra, (Slattery J) and in relation to the Trade Practices allegation to the decision of Spar Licensing Pty Ltd v MIS Qld Pty Ltd [2014] FCAFC 50; (2014) 314 ALR 35 (which was relevant to misleading and deceptive conduct and representations with respect to future matters).
2. The judgment in Winnote was relied upon by the defendant to support the proposition that a cause of action in tort accrues upon the occurrence of damage consequent upon the pleaded breach of the duty of care and becomes statute‑barred after six years (pursuant to s 14 of the Limitation Act 1969) from the point when such damage occurs. The damage, it was acknowledged, has to be actual and measurable damage as opposed to prospective or negligible: Winnote per Mason P at [40]. It was submitted that it is irrelevant that the plaintiff may have been unaware of the true position, including the fact of negligence or damage having occurred. In support of the latter proposition reference was made to the decision in Scarcella v Lettice (2000) 51 NSWLR 302, cited with approval by Mason P in Winnote at [40].
3. Winnote was a case involving a client who sought advice from a firm of solicitors regarding acquisition of a right to extract peat from a deposit in Victoria. The firm advised the client that a lease should be executed with the owner of the land in which the deposit was located. The advice provided by the firm was inaccurate because the right to extract peat, being a mineral, was dependent upon the grant of a mining lease. In reliance upon the advice a lease was executed in 1998 with the land owner.
4. Mason P set out the principles referred to in the Defendant's Outline of Submissions at [40]-[41] of his judgment concerning the significance of "damage" to the accrual of a cause of action including, in particular, with claims for economic loss.
5. The learned President noted that Winnote's argument was to be rejected as the claim did not involve a contingent loss type of claim: at [44]. Time was held to have run in tortious negligence upon clearly demonstrable actual damage occurring at a particular point in time and it expired before proceedings were launched in 1995.
6. In Winnote, Mason P examined various situations where a question has arisen as to whether a single cause of action has commenced to run in consequence of particular damage having occurred: at [64]-[65]. One such situation involved the case where one contract and one promise was to be performed at one time, although a defendant may have failed to perform in one or many respects. In cases where there was but one promise, separate or successive breaches would not prevent time from running from the date of the first breach: Winnote at [65].
7. In Forster v Outred, the plaintiff executed a mortgage in February 1973 in the presence of the defendants who were acting as her solicitors. The mortgage charged her freehold property as security for a loan made by a company to her son, who subsequently went bankrupt. Following a demand under the mortgage on 21 January 1975 the plaintiff repaid the loan. She commenced proceedings by writ on 7 January 1977 claiming damages for negligence and/or breach of contract by the defendants in failing to properly advise her when the mortgage was executed.
8. On appeal, the question to be decided was the time at which the plaintiff's cause of action accrued.
9. Stephenson LJ at 94 posed the question "What is meant by actual damage?" and a little later stated: "A question which has led to much argument - and which I have not found altogether easy to answer - is whether what happened to the plaintiff, to use a neutral phrase, when she signed the deed constituted actual damage … It is perfectly true that she was under no matured or actual liability to pay the sums that she ultimately did pay to the mortgagees until they made a demand, and if there was no actual damage before the date then it is agreed … that the second writ was issued within the period of limitation running from no date earlier than that.'
10. A little later Stephenson LJ referred to a number of authorities and observed at 95: "As I read that case and those judgments, the court was saying that the taking of insufficient security, although at the time it was taken it caused no actual damage in the sense of financial loss causing the plaintiff/client to lose the chance of getting any money or to pay out any money, was nevertheless the cause of probable loss and that constituted the cause of action. The cause of action arose because the damage occurred at that time, which was more than six years before the action was brought, and the fact that there was actual loss at a later period within the six years did not help the plaintiff to overcome the defence of the Limitation Act, and his claim was statute barred. That was the taking of inadequate security negligently, and perhaps in breach of contract, by a solicitor."
11. In answering the question earlier posed, Stephenson LJ at 98 concluded: "Although there was no more direct authority than those cases among those which have been cited to us, I would accept Mr Stewart-Smith's statement of the law and would conclude that, on the facts of this case, the plaintiff has suffered actual damage through the negligence of her solicitors by entering into the mortgage deed, the effect of which has been to encumber her interest in her freehold estate with this legal charge and subject her to a liability which may, according to matters completely outside her control, mature into financial loss - as indeed it did. It seems to me that the plaintiff did suffer actual damage in those ways; and subject to that liability and with that encumbrance on the mortgage property was then entitled to claim damages, not, I would think, an indemnity and probably not a declaration, for the alleged negligence of the solicitor which she alleges caused her that damage. In those circumstances her cause of action was complete on February 8, 1973 and the writ in which she issued on March 25, 1980 was issued too late to come within the six years' period of limitation."
12. In his brief oral submissions, Mr Eardley made two points. First, he relied upon the observations of Mason P in Winnote at [64]. In that paragraph, the President referred to the position of separate causes of action arising out of separate incidents of damage. It was submitted that the letter from the defendant's solicitor to the plaintiff dated 1 July 2010: "… very simply establishes the first step in the cause of action because what Mr Trodden does in this letter is he says he is going to do something. 'We will continue to pursue registration of the transfer'. The simple reality is he did not …": T 18.
13. The second point raised by Mr Eardley was said to relate to loss and damage as relevant to the causes of action pleaded. It was submitted that the loss and damage clearly occurred each day following the actual admission by the solicitor to the plaintiff in 2010 and that the letter of 1 July 2010 from him indicated that the retainer was clearly still on foot. It was intended that he would do something but he failed to do anything; in particular, failed to give advice to the plaintiff. It was alleged that there was a failure to warn of the loss and damage that might occur as a result of the transaction involving NAB: T 18.

Determination

1. The commencement point of the consideration on the present application is that a high burden faces the defendant in obtaining an order for summary dismissal under Rule 13.4 of the UCPR 2005 or alternatively an order striking out the Statement of Claim in whole or in part pursuant to Rule 14.28 of the UCPR. That burden arises from and is based upon the principles expressed by Dixon J in Dey v Victoria Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 92 and in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129 and Webster v Lampard [1993] Aust Torts Rep 81-236; (1993) 177 CLR 598 at 603. The relevant principles are well-known and include the following: 1. An application to strike out a statement of claim on the grounds that it does not disclose a cause of action is to be refused unless the claim which is attacked is so clearly untenable that it cannot possibly succeed. 2. The plaintiff's right to state his/her own case as he/she will and to plead the facts which he/she contends will ground his/her claim, is not to be restricted unless it appears on the face of the pleading that the connection contended for between the facts alleged and the claims which are made out is bound to fail.
2. Reference will be made below as to the need for caution in ensuring that summary judgment applications are suitable for summary determination.
3. As earlier discussed, the defendant's fundamental position is that the registration of NAB's mortgage over the subject property in March 2008 diminished the value of the plaintiff's equity of redemption. The registration of the mortgage meant that at that stage it was not possible for the defendant to register the plaintiff's transfer: T 14-15. Further, the decision in Forster v Outred stands as authority for the proposition that once the mortgage to NAB was registered, the registration damaged the plaintiff's equitable redemption and consequentially damage accrued: T 16.
4. The Statement of Claim refers to the circumstances in which the mortgage to NAB came about. On the plaintiff's allegations, prior to 3 March 2008, the plaintiff's former husband approached the defendant solicitor and instructed him to provide various documents and the Certificate of Title for the subject property to NAB so that a mortgage instrument could be registered: Statement of Claim at [11].
5. In the Statement of Claim it is frankly conceded by the plaintiff that she was aware of the loan: at [13]. However, what the plaintiff was told about the loan and/or the proposed mortgage is not known from the pleading setting out her causes of action.
6. It is also noted that there is no admission or concession in the Statement of Claim that the plaintiff was made aware of the fact that the loan taken out by Mr Morris was not for a specific amount but was an all monies loan.
7. On the pleading of the causes of action in the Statement of Claim it appears that it was not until sometime after the loan/mortgage transaction with NAB that the plaintiff became aware of the significance of the registration of the NAB mortgage and its impact on her interest in the property. The evidence on the present application suggests that she communicated with the defendant in 2010. The letter written by the defendant to the plaintiff dated 1 July 2010 (Exhibit 1) referred to "… your recent conversations with our Mr Trodden". The letter went on to refer to a caveat having been registered and included a statement that "we will continue to pursue registration of the transfer". Accordingly, it is at least arguable on the pleading and Exhibit 1 that at some point in or about July 2010 the plaintiff was advised by the defendant of the fact that the transfer had not been registered. The solicitor told her that he would continue to pursue its registration. Additionally, there is a possible inference, based on the Statement of Claim and the evidence on the motion, that the plaintiff was, in or after July 2010, made aware of the significance of the registration of the mortgage to NAB that had taken place on 3 March 2008 to her interest in the property and difficulties in achieving registration of the transfer.
8. It is on the basis of the matters referred to in the Statement of Claim that it is necessary to consider the defendant's application to dismiss or strike out the claim, in particular, the significance, if any, of the facts as pleaded and proved in evidence to the limitation defence.
9. In Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, then Warren J (presently the Chief Justice of the Supreme Court of Victoria) considered the principles that apply in ascertaining the accrual date in certain economic loss cases. These include cases in which a solicitor wrongfully in breach of his or her duty to another fails to inform or advise his or her client of the significance of a document or instrument (such as a mortgage) and in which the solicitor seeks to rely upon the plaintiff's inaction in bringing proceedings in circumstances where he or she was unaware until a later date of the significance or impact the transaction in question had upon his or her interests or rights.
10. In Di Sante, the plaintiff was the executrix and the beneficiary of the Will of one Guiseppe Di Sante. She alleged that the deceased, and later herself in her capacity as executrix of his estate, invested monies with various financial institutions totaling almost $250,000. Prior to his death the deceased, and subsequently the plaintiff in her capacity, retained a firm of accountants, C Petrilli and Associates, the principal of which was one Mr Petrilli, to manage the invested monies.
11. The plaintiff alleged that on or about 26 March 1992 Mr Petrilli forged the signature of the plaintiff on relevant documents required by various financial institutions that held the invested monies. In due course a number of cheques were drawn by those institutions in favour of either of the estate of the deceased, the plaintiff or the first defendant Camando Nominees Pty Ltd, a company of which Mr Petrilli was a director. The cheques were variously marked "account payee only" and/or crossed and marked "Not Negotiable". Ultimately, the cheques came to be deposited into either an account in the name of Camando Nominees Pty Ltd or an account in the name of C Petrilli Trust Account at ANZ. It was alleged that Mr Petrilli embezzled the invested monies and that the plaintiff never received those monies. It appeared that the plaintiff discovered the actions of Mr Petrilli in about April 1996 but did not seek to draw on the invested monies until about January 1998 when the various financial institutions that held the invested monies refused to pay the plaintiff. ANZ, in defence, alleged that the claims accrued in 1992 when the relevant cheques were paid into the Trust Account. As the proceedings were issued on 21 January 2000 that was outside the six-year limitation period and, therefore, statute‑barred. The plaintiff in response relied upon a number of matters including the contention that the cause of action did not accrue until January 1998 when the various financial institutions failed to pay the relevant amounts to her.
12. In the course of her Honour's detailed analysis of the facts and principles, considerable attention was given to observations of different members of the High Court in Hawkins v Clayton (1988) 164 CLR 539 in which a limitation defence had been pleaded against a solicitor's negligence claim. In that case upon the testatrix's death the solicitors who held the Will made no attempt to locate the executor appointed under the Will for a period of six years, during which period a house property which constituted an asset of the estate, remained vacant and fell into disrepair.
13. In Hawkins v Clayton, the Court of Appeal of New South Wales had held that the claim was statute barred. In a minority judgment, McHugh JA identified special or different circumstances that were capable of distinguishing the case from the authorities concerned with the limitation periods that applied to claims for damage to the person or property.
14. On appeal from the Court of Appeal, the majority of the High Court held that the action was not statute‑barred. Brennan J at 562 held that a cause of action does not accrue unless there was someone who can institute the action. His Honour held that the cause of action did not accrue until another element crystalised, namely, the appointment of an executor of the estate and that as a consequence the claim was not statute‑barred.
15. In Hawkins v Clayton, Deane J accepted that there may be special cases where limitation principles that applied in personal and physical injury claims may be subject to qualification in cases of pure economic loss: at 588. His Honour at 587-8, held that a cause of action lying in negligence accrues when the damage is sustained.
16. Deane J, however, also then addressed cases which might be said to form a special class of case where the negligence of a solicitor, which can be said to inflict injury also has a further effect, namely, where the wrongful effects of the solicitor's act preclude the bringing of an action for damages, a view which appears to have been adopted by Gaudron J at 600-601.
17. In Di Sante, Warren J considered a number of cases that dealt with the concepts of "damage" and "discoverability of damage" as a criterion for the accrual of a cause of action in relation to claims for pure economic loss. These included the judgment in Crisp v Blake [1992] ATR 81-158 (Mathews J), the High Court's judgment in Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514; Gillespie v Elliott (1987) 2 Qd R 509 and the judgment of the Full Court of the Supreme Court of Victoria in Doundoulakis v Antony Sdrinis & Co (1989) VR 781. Her Honour then stated: "29 However, since the judgments of Brennan, Deane and Gaudron JJ in Hawkins v Clayton and the majority in Wardley, it can be said that the determination of the time of the accrual of the cause of action is not always a time that can be identified with ready precision. In Pullen v Gutteridge Haskins & Davey Pty Ltd (1993) 1 VR 27 at 65-71 the Appeal Division of this court followed the judgments of Deane J in Hawkins v Clayton and Sutherland Shire Council v Heyman (1985) 157 CLR 424. (In that case) Brooking, Tadgell and Hayne JJ held that in cases of pure economic loss due to a latent defect in design, time begins to run when the latent defect first becomes known or manifest."
18. In Wardley, Deane J re‑stated the principles he expressed earlier in Hawkins v Clayton. Warren J in Di Sante observed that his Honour in Wardley (at 540) after re-stating the rejection of discoverability as a qualification to limitation provisions in negligence cases for economic loss stated: "The court's rejection of such an overriding qualification does not, however, alter the fact that, in some of the cases where an action lies in negligence for pure economic loss, no relevant loss is actually sustained or suffered and no cause of action for damages accrues unless and until some actual adverse consequence of the negligence is known or becomes manifest."
19. In that case her Honour found that on the facts no other consequential damage became manifest in 1998 when the plaintiff learned of the actions of Mr Petrilli and ANZ.
20. It is important in the present case to observe that in and after March 2007 the defendant solicitor acted under a retainer for both the plaintiff and her former husband, Mr Morris, in respect of the application for exemption for stamp duty and in relation to the transfer of title to the plaintiff. In March 2008, the defendant solicitors acted on the instructions of Mr Morris in respect of the NAB loan/mortgage. Up until that time the solicitor, on the pleading, had done nothing to fulfill his obligations to the plaintiff in respect of his retainer to transfer title in the subject property to her. The letter written by the defendant to the plaintiff on 1 July 2010 (Exhibit 1), is an indication that he was still acting for the plaintiff in pursuing what he had earlier undertaken to do (effect registration of the transfer) but had not yet done.
21. Whether the defendant and Mr Morris had any relationship other than that of solicitor/client is, of course, unknown on the pleading and evidence in the present application. The fact is, however, that he agreed again to act at Mr Morris' request in 2008 to assist him in providing a first mortgage to NAB which transaction directly and adversely impacted upon the plaintiff's interest in the property. He did so even though he had been retained in 2007 to act for the plaintiff in relation to the transfer of title in the property which Mr Morris in 2008 wished to provide as security in respect of his loan with NAB. On the pleadings no advice was given by the defendant to the plaintiff about the transfer not having been registered before the NAB mortgage transaction was entered into and completed.
22. Any failure by the defendant to advise the plaintiff in respect of his failure to register the transfer of title to her, and the implications that had for her in allowing the property to be mortgaged to NAB, could be a central matter on questions of duty, breach and damage.
23. As noted above, in June/July 2010, the defendant solicitor entered into "recent conversations" with the plaintiff (Exhibit 1) about the caveat, in which the non-registration of the transfer was discussed. By 1 July 2010, of course, the plaintiff's interest in the property had been significantly diminished by reason of the NAB mortgage and the drawdown loans under the NAB loan/mortgage transaction. The letter of 1 July 2010, however, does not indicate or establish that the defendant solicitor advised the plaintiff as to any possible implications or repercussions flowing from his failure to register the transfer of title and as to any rights she may have as a result, in particular, as to any possible liability in himself which would disqualify him from further advising and acting for her. As noted above, in the letter he simply said "We will continue to pursue registration of the transfer".
24. A question arises as to whether the defendant solicitor's alleged failures or breaches of his duty to the plaintiff, as well as any continuing duty and breach is relevant as to when the cause of action accrued to the plaintiff. On this aspect I consider that it is instructive to examine the issues determined in Hawkins v Clayton and in particular the dicta of Deane J in that case, it being noted that Mason CJ and Wilson J in their agreement with Deane J, formed the ratio decidendi of the judgment.
25. In Hawkins v Clayton, Deane J at 588-589, identified a number of factual matters before addressing the "injury" resulting from negligent failure to inform Mr Hawkins of the Will and the significance of the failure to inform to the accrual of the cause of action. Deane J observed: 1. That it could be assumed for the purposes of the case that economic loss caused by the negligent failure to inform Mr Hawkins of the existence and contents of the testatrix's Will was first sustained, in the sense that rent was not earned, within 12 months of her death. 2. It was arguable that, in the circumstances of the case, the duty of care owed by the firm was a continuing one, that the breach of that duty continued up until the firm finally took positive steps to locate Mr Hawkins and inform him of the existence and contents of the Will and that damage (which could include the loss of a right of action by the operation of the Limitation Act) continued to accrue in varying forms right up until the Stamp Duties Office imposed a fine for late lodgment of the Death Duty Return and when Mr Hawkins incurred additional legal costs. 3. In the circumstances there was something to be said for the view that a distinct cause of action accrued each time new damage was incurred by reason of the continuing breach of duty. It, however, was unnecessary to pursue such problems involved in the firm's defence based on the Limitation Act.
26. Deane J then observed at 589-590: ""It is inevitable that a Statute of Limitations will, on occasion, lead to injustice in the special circumstances of particular cases. Such injustice, when it occurs, is an unavoidable cost of the benefits involved in ensuring that plaintiffs act promptly and that defendants are not subjected to the litigation of stale claims. The present case falls, however, in an anomalous category where the applicability of a limitation provision such as s 14(1) would invariably involve prima facie hardship and injustice and where any compensating public benefit, apart from protecting the courts from being required to determine issues of distant fact, is absent. If a wrongful action or breach of duty by one person not only causes unlawful injury to another but, while its effect remains, effectively precludes that other from bringing proceedings to recover the damage to which he is entitled, that other person is doubly injured. There can be no acceptable or even sensible justification of a law which provides that to sustain the second injury will preclude recovery of damages for the first. It would, eg, be a travesty of justice and common sense if the law provided that a cause of action lay for damages for false imprisonment but then went on to provide that that cause of action would be lost if the false imprisonment continued for six years after the cause of action first accrued. Likewise, it would be a travesty of justice and common sense if the law imposed a duty upon a solicitor to take positive steps to inform a third person of the contents of a document of which the solicitor was alone aware and then provided that any cause of action against the solicitor for damage caused by a negligent failure to perform that duty would be lost if the negligence continued for six years. It is arguable that the notion of unconscionable reliance upon the provisions of a Statute of Limitations which provides the foundation of the long-established equitable jurisdiction to grant relief in a case of concealment of a cause of action until after the limitation period has expired (cf s 55(1) of the Limitation Act) should, by analogy, be extended to cover cases such as these where the wrongful act at the one time inflicts the injury and, while its effect remains, precludes the bringing of an action for damages. It seems to me, however, that the preferable approach is to recognize that it could not have been the legislative intent that the effect of provisions such as s 14(1) of the Limitation Act should be that a cause of action for a wrongful act should be barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of proceedings. On that approach, the reference in s 14(1) of the Act to the cause of action first accruing should be construed as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings."
27. Deane J observed that the negligent failure of the firm to notify Mr Hawkins of the existence or contents of the testatrix's Will effectively precluded the institution of the proceedings against the firm until he was finally informed of his appointment as executor. It was noted that the proceedings in that case were instituted within six years of that time. That being so, Deane J observed, the firm's defence based upon the Limitation Act failed (at 591).
28. In Wardley Australia Limited, Deane J, at 540, noted that in Hawkins v Clayton the majority rejected a submission as to a qualification to the effect that at least in the case of claims in negligence for damages for economic loss, time under a limitation provision does not commence to run until the stage is reached when the plaintiff discovers, or could on reasonable inquiry have discovered, that the loss has been sustained. However, Deane J in Wardley also observed at 540: "The Court's rejection of such an overriding qualification does not, however, alter the fact that, in some of the cases where an action lies in negligence for pure economic loss, no relevant loss is actually sustained or suffered and no cause of action for damages accrues unless and until some actual adverse consequence of the negligence is known or becomes manifest. Nor does the rejection of such a qualification provide, by analogy or otherwise, a general answer to the question whether the mere incurring of a contingent liability to make a future payment of itself constitutes loss or damage for the purpose of determining when a cause of action of which loss or damage is a necessary ingredient accrues or arises." (emphasis added)
29. More recent authority exists on the question whether the failure by a solicitor to disclose relevant information to a client may operate to defer the application of the limitation period. Such authorities, in particular, also confirm that it is often unwise to seek to embark on a determination of such issues on an application for summary dismissal. In Issa v Issa [2015] NSWSC 112 a submission was made by counsel for the respondent on a summary dismissal application based on a limitation period having expired that it was arguable that the limitation period did not apply 'because the alleged wrongful acts themselves effectively precluded the bringing of proceedings,', relying on the dicta of Deane J in Hawkins detailed above. White J made the following comments: "36 …The status of Deane J's observations in Hawkins v Clayton remains unclear. Mason CJ and Wilson J agreed with this part of Deane J's reasons (at 543), but they dissented in the result (see Walmsley v Cosentino [2001] NSWCA 403 at [48] and State of New South Wales v Harlum [2007] NSWCA 120 per Basten JA at [144]). The principle enunciated by Deane J has often been distinguished by reasoning which assumes that a negligent act only "effectively precludes" the bringing of proceedings if it makes it impossible for such proceedings to be brought (Sampson v Zucker (unreported, New South Wales Court of Appeal, 11 December 1996); Cheney v Duncan [2001] NSWCA 197; (2001) 34 MVR 28 at [31]; see also Scarcella v Lettice [2000] NSWCA 289; (2000) 51 NSWLR 302 at [43]). 37 In my view, and having regard to the warning of the High Court in Wardley, these are not questions that should be determined on an application for summary dismissal. It is true that the facts in Hawkins v Clayton were such that the solicitors' negligence made it impossible for the plaintiff to bring proceedings within the limitation period, but the principle stated by Deane J, that was endorsed in general terms by Mason CJ and Wilson J, was expressed in terms that s 14(1) did not bar a cause of action for a wrongful act that itself "effectively precluded" the bringing of proceedings, not that rendered it impossible for the plaintiff to bring proceedings. Effective preclusion might suggest something short of an impossibility. I agree with the submissions of counsel…that the question whether or not the facts of this case could fall within the principle identified by Deane J in Hawkins v Clayton is not suitable for summary determination as there are factual issues to be determined which might impinge upon the principles to be applied."
30. In the Queensland case of Melisavon Pty Ltd v Springfield Land Development Corporation Pty Ltd [2014] QCA 233, McMurdo P outlined the authorities relevant to determining when a cause of action accrues for economic loss including Hawkins v Clayton and made the following observations: "[53] Ordinarily, a cause of action for tortious negligence is complete when there is any manifestation of damage which is ultimately found to be connected to the alleged negligence. But it is at least arguable that this is a case of pure economic loss where in Australia that principle has been modified. The incremental development in Pullen of the legal principles established in Hawkins v Clayton has been followed in a number of jurisdictions. Until the High Court says otherwise, the cause of action in the present case was complete when the respondent suffered economic loss, that is, when the respondent had actual knowledge of the appellant's faulty engineering design or when the faulty design itself became manifest or could be discovered by reasonable diligence. [54] The application of those principles in this case will require many and various factual findings to be made at trial as to the disputed issues between the parties. This case demonstrates why courts are reluctant to grant summary judgment based on a limitation defence where the facts are disputed…"
31. On the pleadings in the present case the factual substratum to the plaintiff's claim as alleged by her is as follows: 1. The defendant solicitor was retained by her to obtain registration of the transfer of title giving effect to an agreement in that respect reached between Mr Morris and herself. 2. The defendant solicitor agreed to act for them in relation thereto but failed to register the transfer as instructed under his retainer. 3. The defendant, at least before July 2010, failed to advise the plaintiff of the fact that he had not undertaken the work for which he had been retained, that is, he had not registered the title. 4. The defendant failed to inform and advise the plaintiff, the transfer not having been registered, of the effect or impact that the proposed mortgage with NAB dated 3 March 2008 would have upon her interest in the property, including the effect that future drawdowns under the loan with NAB would have upon her interest. 5. The defendant failed to inform the plaintiff to obtain independent advice before the NAB loan/mortgage proceeded. 6. The defendant failed, before 2010, to inform the plaintiff that in the circumstances referred to in (1) to (5) above, she may have a cause of action against him and/or that she should in her own interests take independent legal advice as to the matters referred to in (2) to (4) above.
32. At some point between 1 July 2010 (the date of the defendant's letter to the plaintiff, Exhibit 1), and the letter written by Lighthouse Law Group, solicitor, on 9 September 2013 (Exhibit A) the plaintiff became aware of relevant facts arising from points (3) and (4) above. Upon the basis of the principles discussed in [87] to [89] above, there exists an arguable basis for the conclusion that the present proceedings were instituted within six years of becoming aware of those matters.

Conclusion

1. On the basis of the pleading and evidence in the present application it is arguable that the plaintiff's case falls within the category of case to which reference was made in Hawkins v Clayton.
2. The proceedings arguably involve wrongful action or breach of duty by the defendant which not only may be said to have caused unlawful loss to the plaintiff but that, while its effects continued, effectively precluded the plaintiff from bringing proceedings to recover the damage to which it is arguable she has an entitlement. In other words, it is at least arguable that on that basis the plaintiff has been doubly damaged by the defendant's failure to register the transfer as agreed between Mr Morris and herself and in failing to disclose to the plaintiff before the registration of the NAB mortgage, which the defendant assisted Mr Morris to achieve, that that would damage her interest in the property.
3. Further, whilst the retainer of the defendant by the plaintiff commenced on or about 22 March 2007, there is evidence upon which it is at least arguable (i) that the retainer continued up to and after 1 July 2010 and (ii) that there existed a continuing breach of duty, including contractual breach, by the defendant beyond the lastmentioned date.
4. On the above bases, I am of the opinion that there is an arguable case that the "damage" alleged by the plaintiff in respect of each cause of action pleaded in the Statement of Claim occurred within the limitation period.
5. In Wardley, the plurality stated: "We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of hearing the action except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question …" (at p 533)
6. On the above basis, I conclude that the defendant has not discharged the onus of establishing a basis for the orders sought in the Notice of Motion, it not having met the high hurdle that applies to summary judgment and strike-out applications to which I have earlier referred. I have concluded that the plaintiff's case is appropriately one for determination at trial, when the trial judge will have the benefit of all of the evidence.

Re-Pleading

1. As noted above, the defendant submitted that the Amended Statement of Claim filed by the plaintiff was embarrassing in that it did not set out the facts material to the matters required to be proved: Defendant's Outline of Submissions at [13]-[14]. It was argued that the pleadings did not satisfy the requirements of the Civil Procedure Act 2002: Grazo v Liverpool/Campbelltown Christian School Ltd [2011] NSWSC 292 in relation to (i) the scope and duration of the retainer; (ii) the duty of care; (iii) how the defendant's conduct was alleged to have been misleading and deceptive; (iv) how s 52 of the Trade Practices Act is alleged to have applied given that the defendant is not a corporation; (v) causation in fact and law; and (vi) loss and damage suffered.
2. It was submitted for the defendant that the deficiencies in the pleading could not be remedied by particulars.
3. I am of the opinion that there are a number of deficiencies in the Amended Statement of Claim and I have noted above that Mr Eardley accepted that there is a need to re-plead at least two paragraphs in it.
4. As mentioned, one cause of action relied upon by the plaintiff in her Statement of Claim is based upon misleading and deceptive conduct. The statutory provisions concerning misleading and deceptive conduct in trade or commerce was previously found in s 52 of the Trade Practices Act 1974 (Cth) and s 42 Fair Trading Act 1987 (NSW) which were in identical terms. The former Act has since been superseded at the federal level by the Competition and Consumer Act 2010 (Cth) which in Schedule 2 sets out the Australian Consumer Law.
5. The Australian Consumer Law was incorporated into New South Wales by amendments to the Fair Trading Act. The new regime commenced operation on 1 January 2011. As such, it is likely that s 18 of the Australian Consumer Law does not apply to the plaintiff's case, but her case may possibly be founded instead on s 42 of the Fair Trading Act, being the applicable provision between 2007 and 2010.
6. It may be arguable that between the date of the defendant being retained on 22 March 2007 and 1 July 2010 on which date the letter, Exhibit 1) was sent to the plaintiff stating that registration would be further pursued, it is at least arguable on the allegations made that separate instances of, or continuing misleading and deceptive conduct occurred on the part of the defendant solicitor. If the events relied upon to support the claim of misleading and deceptive conduct are found to have occurred and continued after 2007, and up to and beyond July 2010, then a limitation defence would not be maintainable.
7. However, submissions before this Court for the defendant raised the question of whether the misleading and deceptive conduct provisions, whether in the Trade Practices Act or the Fair Trading Act, apply to individuals such as the defendant at all or solely to corporations, suggesting that the plaintiff's claim is unsustainable as a result. Section 131 of the Competition and Consumer Act 2010 appears to make it plain that the Australian Consumer Law, at least at the federal level, applies to "the conduct of corporations". The situation with respect to the adoption of the Australian Consumer Law into New South Wales may be less clear. I do not consider it to be necessary to resolve the issue of whether the limitations on the Federal Australian Consumer Law apply to statutory misleading and deceptive conduct provisions at the State level in terms of their applicability to an individual rather than a corporation except to note that consideration on this question, as well as the applicability of the new laws, may be required in determining appropriate amendments to the Statement of Claim.
8. I propose to grant leave to the plaintiff to amend the Statement of Claim in order to address the deficiencies in it and to ensure that the pleading of the plaintiff's causes of actions conform with the requirements of proper pleading, including in particular, the requirements of the Civil Procedure Act and the UCPR.
9. Accordingly, I propose the following orders: 1. That the Notice of Motion in relation to the orders sought in paragraphs (1) and (2) is dismissed. 2. Leave is granted to the plaintiff to file an Amended Statement of Claim within 28 days of the date of these orders. 3. I reserve the question of costs. 4. I grant liberty to either party to make application in respect of the costs of the application.

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: 05 June 2015