Odlum v Friend & Anor

Supreme Court of NSW|2022-03-31|Before: Cavanagh J, Bellew J, Schmidt AJ, Macready J, Schmidt J

Judgment

This is the judgment in respect of the plaintiff's claims for professional negligence against her former solicitor and barrister who acted for her in a de facto property dispute (the original proceedings) pursued in the Equity Division of this Court in 2010 .
The plaintiff alleges negligence and conduct contrary to s 42(1) of the Fair Trading Act 1987 (NSW) (then in force) in relation to the advice provided to her by the defendants in respect of costs offers made by her former partner (the first defendant in the original proceedings) in December 2011. Those costs offers were made subsequent to the judgment of Associate Justice Macready in the original proceedings. [1]
The plaintiff says that consequent on the alleged failure of the defendants to properly advise her about those costs offers, she lost the opportunity to acquire sole title to the property which she owned jointly with her former partner at Macmasters Beach. She claims additional extensive losses including accommodation costs for her children, losses arising from her inability to work, the development of medical conditions and losses arising from the potential subdivision of the property and other rental opportunities.
The claim amounts to $9,039,800.

Conduct of the proceedings

These proceedings were commenced in December 2017. At that time, the plaintiff was legally represented.
Subsequent to the commencement of the proceedings her solicitors ceased to act.
During the period 2017 to 2021, the matter was subject to extensive case management.
On two occasions, the Court referred the plaintiff for pro bono legal assistance pursuant to r 7.36 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). On both occasions, she received such assistance. Whatever the nature of that advice or legal assistance, the relationship between the plaintiff and those advisers did not continue.
The matter was originally listed for hearing before Acting Justice Schmidt commencing on 2 November 2021. At that time, the plaintiff applied for an adjournment of the proceedings, having failed to comply with earlier orders relating to the preparation for the hearing. The plaintiff again sought that the Court appoint a barrister to represent her or a further referral for pro bono legal assistance.
She had also made an earlier application before Bellew J for legal assistance which was refused (she, having already obtained such assistance, being referred on two prior occasions). [2]
As set out in her Honour's judgment of 2 November 2021, Schmidt AJ rejected the plaintiff's application for an adjournment at that time. However, during the course of the hearing, the plaintiff was admitted to hospital and could not continue with the case. The hearing was terminated.
Subsequent to the adjournment of that hearing, the plaintiff filed a further motion, again seeking pro bono legal assistance. The application was heard by Ierace J on 11 March 2022. The application was dismissed.
I then brought the matter before me on 23 March 2022 for the purposes of ensuring that the matter was ready to proceed on 28 March 2022. The plaintiff again indicated that she required legal assistance and maintained that she should not be compelled to proceed with her action at this time. After I explained to the plaintiff that the matter would be proceeding during the allocated hearing time and provided some explanation as to the processes of the hearing, she indicated that she was not capable of and would not be cross-examining either of the defendants.
Further, although the hearing was allocated as a hearing in person, she did not wish to appear other than by AVL. I agreed to that request.
On the hearing commencing, the plaintiff thus appeared only by AVL. However, after a short period when I could see her, she covered the camera of her computer so she could not be seen.
During the hearing the plaintiff continued to maintain that she should not be compelled to pursue her case without legal assistance and she simply had no understanding of what was happening.
However, it was apparent that the plaintiff had an understanding of the Court processes and procedures and was able to prepare for the hearing. For example, despite suggesting that she could not and would not cross-examine, she demonstrated that she had prepared extensively for cross-examination and in fact did cross-examine the defendants over a number of hours. Indeed, she suggested that she had prepared 36 pages of cross-examination for the second defendant, albeit she said that she would distil it down to 6 pages.
At the end of the evidence, the plaintiff indicated that she would not and could not provide submissions during the allocated hearing time. She required weeks to prepare. When I rejected that application, she purported to terminate her AVL. That is, she purported to leave the Courtroom, despite the fact that submissions were about to start. I stood the matter over for submissions until the next day.
On Friday 1 April 2022 she sent an email to my Chambers indicating that she had fainted the day before and that the Police and Ambulance had attended. She then said that she had been "forcefully scheduled" and taken away to hospital. She provided her fainting as the reason why the AVL was terminated. However, when I confirmed that the case would be proceeding, she again attended (through the AVL) and did not mention what she maintained had happened to her.
The plaintiff was afforded an opportunity to present the case the way she wanted to present it; that is being able to hear and see anyone she wanted to see and hear but with no one being able to see her.
The case was thus completed over five hearing days including written and oral submissions from the plaintiff and I reserved my decision at the end of the hearing. Having said that, a week after the case concluded the plaintiff sent further submissions to my Chambers. The defendants raised no objection to the plaintiff relying on those further submissions and I have had regard to them.

Background to these proceedings

The plaintiff and her former partner, Darryl Bowling, commenced living in a de facto relationship in either 1991 or 1992. That relationship ended in May 2007. On or about 14 May 2010 the plaintiff retained the first defendant to act on her behalf in respect of property settlement matters with Mr Bowling.
On 11 August 2010 the plaintiff commenced the original proceedings, seeking orders for an adjustment of property under the Property (Relationships) Act 1984 (NSW) (Relationships Act) as against Mr Bowling.
On 20 August 2010 the first defendant briefed the second defendant to advise and appear in the original proceedings.
On 21 September 2010 Mr Bowling filed a defence and cross-claim. A mediation took place on 22 December 2010.
During 2011 Mr Bowling made a number of offers to settle the proceedings including two Offers of Compromise. The plaintiff also made offers to settle the proceedings.
There is a dispute as to the instructions the plaintiff provided in respect of the offers by Mr Bowling and what instructions the plaintiff provided in respect of any offers to be made on her behalf.
The proceedings were heard by Associate Justice Macready on 28 and 29 September 2011. Judgment was delivered on 7 December 2011.
On 9 December 2011 Mr Bowling made a written offer in relation to his entitlement to costs (the first costs offer)
On 13 December 2011 the first defendant responded with an offer on behalf of the plaintiff in respect of costs, although the plaintiff seems to deny that she had agreed to such an offer being made.
On 14 December 2011 Mr Bowling made a further offer in respect of costs, reducing his original offer of $30,000 down to $23,000 (the second costs offer).
On 15 December 2021 Associate Justice Macready delivered his judgment on costs.
The result of the proceedings was that: 1. The plaintiff was allowed 21 days to raise funds to purchase Mr Bowling's interest in the property otherwise the property would be listed for sale; 2. The net proceeds of sale would be divided 65% to the plaintiff and 35% to Mr Bowling after repayment of the sum of $125,000 said to have been owed to the plaintiff's mother, Norma Odlum, and an adjustment of $23,016 in favour of the plaintiff; and 3. The Court ordered the plaintiff to pay 75% of Mr Bowling's costs on an ordinary basis.
The amount that she was ultimately required to pay Mr Bowling on account of costs was approximately $98,000, having rejected the earlier offers from Mr Bowling to pay the sum of $30,000 then $23,000 on account of costs.

The pleaded case

Although it may be difficult to gather from the plaintiff's extensive submissions and indeed the 2,300 pages of evidence relied on by the parties, the issue in these proceedings is limited to the advice given by the defendants in respect of and in response to Mr Bowling's costs offers subsequent to the handing down of the principal judgment.
In her Statement of Claim filed on 14 December 2017, the plaintiff pleads that the defendants owed a duty of care to her and that her consistent instructions to the defendants were to the effect that she wished, if at all possible, to acquire all of Mr Bowling's estate and interest in the property at Macmasters Beach.
After referring to the principal judgment she pleads the firsts costs offer of 9 December 2011 from Mr Bowling to accept the sum of $30,000 in respect of costs.
She then pleads that, despite her standing instructions in respect of acquiring the whole of the interest in the property, each of the defendants advised her to reject the first costs offer. She says that as a consequence of accepting the defendants' advice, she lost the opportunity to acquire the sole interest in the property and to limit her liability to pay costs of $30,000 to Mr Bowling.
She pleads that the defendants were negligent and engaged in misleading and deceptive conduct in contravention of s 42(1) of the Fair Trading Act (then in force) in respect of the advice relating to the first costs offer.
She pleads that the advice given by the defendants was given to persuade her to believe that her position in relation to resisting an adverse costs decision was substantially stronger than it could have reasonably been assessed to have been.
As emerged during the hearing, the plaintiff also alleges that the defendants negligently advised her or failed to advise her in respect of the second costs offer as of 14 December 2011. She maintains that the defendants in fact provided no advice to her in respect of the second costs offer prior to the costs hearing and judgment on costs.
During submissions, Mr Lloyd on behalf of the first defendant accepted that the latter complaint also formed part of the issues for determination (as it related to advice on the costs issue) albeit that it was not pleaded. I understood Ms Webster on behalf of the second defendant to adopt the same position.
Despite the plaintiff's wide-ranging criticisms, there was no application to amend the Statement of Claim to raise other issues which the plaintiff continued to ventilate throughout the trial, even though it was pointed out to her that these issues were not the subject of any allegations or mention in her pleadings.
This being an action based on a failure to take care, the matter is subject to s 5B of the Civil Liability Act 2002 (NSW) (CLA).
There is no dispute that the defendants owed a duty of care to the plaintiff in respect of the advice that they were providing to her. The duty was to exercise due care, skill and diligence in undertaking the task required, assessed as against the competence and skill that is usual among professional persons undertaking similar tasks. [3]
As the claim arises out of advice in respect of settlement, the defendants do not have the benefit of advocates' immunity. [4]
Whilst the proper identification of the risk of harm was not really touched upon, I take the risk of harm to be the risk of the plaintiff suffering an adverse costs order should she not have been properly advised on the offers made by Mr Bowling. Nothing said by the High Court in the recent decision in Tapp v Australian Bushmen's Campdraft & Rodeo Association Limited [5] leads to any different description of the risk of harm in this case.
Having regard to the terms of Mr Bowling's costs offers, the risk of an adverse costs offer was reasonably foreseeable and not insignificant. Indeed, on the defendants' evidence and contemporaneous documents, it was a risk well-recognised by the defendants.
In terms of liability, the critical issue is thus what advice was given by the defendants about Mr Bowling's costs offers and whether that advice was consistent with proper professional practice, that is, has the plaintiff established that in their communications (or lack of) with the plaintiff about Mr Bowling's costs offers the defendants failed to exercise the care and skill required of them.
It is also important to observe that the scope of any duty of care owed by a solicitor or barrister must be informed by the terms of the retainer. Some of the questioning by the plaintiff tended to suggest that the first defendant was in some way obliged to ensure or even organise financing for the plaintiff to enable her to buy out Mr Bowling and keep the property. There is no evidence that the first defendant's retainer required him rather than the plaintiff to take such steps.
It is also important to observe that the exercise of reasonable care in providing advice as to settlement offers does not extend to compelling or forcing the plaintiff to settle the case or even to accept any advice which may have been given. [6]
A case such as this has been described as being one in which it is necessary for the plaintiff to establish that the defendants "had given bad or incorrect advice" about any proposed settlement and that the defendants were negligent in doing so. [7]

The plaintiff's contentions

Despite the complexity of her submissions and the volume of documents relied upon and, leaving aside the extraneous and broader issues that the plaintiff raised at the hearing and in her affidavits, the plaintiff's case is that: 1. If she had been properly advised about either one or both of the costs offers put by Mr Bowling subsequent to the principal judgment, that is, advised to accept the costs offers, she would have accepted that advice; 2. Her costs liability to Mr Bowling would have been limited to $30,000 (or $23,000, I am not sure which) rather than $98,000; 3. She would have been able to arrange finance, specifically through the contribution from her mother and a loan from the ANZ Bank, to buy out Mr Bowling and pay the costs; 4. Having bought out Mr Bowling, she would have retained sole title to the Macmasters Beach property; 5. She would have continued to live and raise her children there; 6. She would have benefited from the increase in value of the property; 7. She would not have incurred other expenses in living elsewhere; 8. She would not have suffered health problems herself; and 9. Her children would not have been impacted upon in the way that they were and they would have been able to find work and not suffer the loss of income which they have suffered.

Defendants' position

The defendants adopt similar positions in response to the plaintiff's claims being: 1. The factual basis of the plaintiff's claim has not been established; 2. They were not in breach of any duty of care owed to the plaintiff. They say that the plaintiff was provided with proper advice in respect of Mr Bowling's costs offers prior to the costs hearing; 3. The plaintiff bears the onus of establishing causation under s 5E of the CLA and she has not done so. That is, she has not established that, even if the advice given in respect of the costs offers was not competent and proper, any loss was caused by such failures. That is because: 1. She would not have accepted any advice given to pay any amount for Mr Bowling's costs; 2. She would not have been able to raise the finance to pay Mr Bowling his share of the value of the Macmasters Beach property without selling the property. In fact, as set out in the judgment, she was afforded 21 days to buy out Mr Bowling before the property was listed for sale and she did not do so; and 3. She has not suffered any loss in any event because: 1. She received her share of the market value of the property through the sale of the property; 2. There is no evidence she suffered any additional losses as if the property had some "special value"; and 3. The other alleged losses claimed are not causally related, too remote and not the subject of necessary evidence.
The defendants also rely on the proportionate liability provisions of the CLA but whether they are relevant depends on any findings of negligence on the part of either defendant.

The plaintiff's evidence

The plaintiff relies on a number of affidavits prepared by her between 2018 and 2021.
She also relies on an affidavit of her mother dated 18 October 2016. Her mother was unable to give evidence in Court.
Although the defendants raised extensive objections to these affidavits in written form prior to the commencement of the hearing, on the hearing they indicated that rather than go through each affidavit they would adopt the approach that I should give such weight to the material as I saw fit and that I might treat many of the statements made by the plaintiff as evidence of her belief rather than evidence of the fact.
The plaintiff was cross-examined on behalf of the first defendant. The cross-examination on behalf of the second defendant was very limited as much of the cross-examination by the first defendant covered the issues which they had in common.
The plaintiff's approach to the questioning of her was somewhat unsatisfactory. Whatever her understanding of the process, she was plainly aware of the issues which were being addressed as part of the questioning. Unfortunately, her answers were often not responsive. Rather than answering some simple questions, she tended to deflect, particularly responding with matters that she wished to raise or emphasise in support of her claim.
Her knowledge of specific points and matters raised in contemporaneous correspondence, such as errors in the mathematics or some purported failure to address a specific point in a letter, demonstrated that, at least for the purposes of these proceedings, she had a thorough understanding and knowledge of the content of the advice given to her in 2011. I found it difficult to accept some of her suggestions of being unable to understand matters when faced with points that did not suit her case.
In the end, other than in respect of one matter (being whether she was given advice about the second costs offer on the morning prior to the costs hearing or only after the costs hearing), this is not a case which turns on assessments of credit. That is because the plaintiff and the first defendant generally confirmed the advice and content of discussions in writing. The contemporaneous documentation is significant in considering the nature of any advice and instructions provided.

The defendants' evidence

The first defendant relies on his affidavit of 2 September 2020. The second defendant relies on his affidavits of 11 September 2020 and 27 September 2020.
Both defendants were cross-examined quite extensively by the plaintiff albeit, much of the cross-examination seemed to focus on the offers which were made in respect of contribution prior to the principal judgment and other issues relating to the plaintiff's understanding and the defendants' conduct leading up to that principal judgment.
There was a specific challenge to the defendants' evidence that they had conferred with her on the morning of the costs hearing, being 15 December 2011, and gave her advice about Mr Bowling's second costs offer.
The plaintiff maintained that no such conference took place and no advice had been given. Indeed, she pointed to the first defendant's handwritten file note of 15 December 2011 as supporting her assertions that the conference must have taken place after the costs hearing.
Before considering the evidence in some further detail and making factual findings, it is necessary to say that the case pleaded by the plaintiff does not involve allegations of negligence in respect of: 1. The defendants' alleged failure to become involved in the plaintiff's financing issues; 2. The defendants' alleged failure to properly explain to the plaintiff matters relating to parenting; 3. The defendants' alleged failure to properly advise on the potential contributions that the plaintiff and Mr Bowling might have to make in respect of the Macmasters Beach property; 4. The defendants' alleged failure to properly advise on the offers made by Mr Bowling to settle the whole proceedings prior to the hearing of the principal proceedings; 5. The defendants' alleged failure to provide advice in respect of the benefits of the plaintiff making offers or further offers as to contribution prior to the principal hearing; 6. The way in which the first defendant and the second defendant conducted the hearing; 7. The submissions made by the second defendant to the court on the principal hearing and then on the costs hearing on behalf of the plaintiff; and 8. The further steps that allegedly should have been taken by the defendants to allow the plaintiff to purchase Mr Bowling's interest and prevent the sale of the Macmasters Beach property.
Further, I accept two of the principal points raised by the plaintiff being: 1. She had instructed the defendants that, if at all possible, she wished to keep the Macmasters Beach property; and 2. She had obtained pre-approval from the ANZ Bank in respect of financing any buy-out of Mr Bowling subject to the orders of the Court and subject to her mother, contributing a sum, going on title and being a joint borrower.
Despite the nature of the plaintiff's pleaded case and it being made clear on a number of occasions during the hearing what this case was not about, it is apparent from the plaintiff's written closing submissions that she continues to pursue arguments which are not available to her. For example, in her final submissions, she refers to: 1. The submissions which should have been made by the defendants during the costs hearing before Associate Justice Macready; 2. The orders that might have been made should the defendants have made different submissions to the Court; 3. Whether Associate Justice Macready properly understood that the plaintiff desired to keep the Macmasters Beach property and would have finance to do so; 4. Whether the earlier advice given by the defendants and, in particular, the first defendant, relating to the earlier offers made by Mr Bowling in respect of contribution was given in such a way that the plaintiff could properly understand the advice; 5. Whether there was any delay or negligence by the defendants in obtaining proper valuation evidence or doing what was necessary to obtain an agreed value with Mr Bowling; and 6. Whether there was an error in either Associate Justice Macready's maths or the calculations of the first defendant as to the effect of the judgment or whether Associate Justice Macready misunderstood the effect of Mr Bowling's earlier offers and any offer made on behalf of the plaintiff.
Having said that, it is clear from the plaintiff's final submissions that she also understands the nature of the case she has pleaded against the defendants because, consistent with her pleadings, she asserts in her final submissions that she was ordered to pay Mr Bowling's costs because no agreement on costs had been reached prior to a costs hearing.
She says this is because the defendants had advised her not to accept Mr Bowling's costs offers. She says that the defendants should have known that it was not possible to win on costs and they wrongly told her that she had done better than Mr Bowling's earlier offers.
She says they failed to explain the effect of the principal judgment properly to her and that she had been specifically told to wait until after the costs hearing. She submits that she was not fully informed of the effect of Mr Bowling's costs offers prior to the costs hearing. As she says in para 20 of her final submissions: "I was not told to pay $30,000 of costs, so that I would be able to avoid costs; advice I would have taken because I wanted to keep my home. I was told the opposite; don't pay $30,000." (original emphasis)
At the end of her affidavit of 7 May 2020 (95 pages) the plaintiff provides a summary of her claim. She says that her claim is for the loss of opportunity. She refers to the failures of the defendants to avoid Court costs and the need for the valuers to confer prior to the hearing. She refers to inconsistencies in the spreadsheets and the mathematical difference between the judgment and the orders based on total assets which she says was picked up only by her.
Importantly, she also refers to being told on 9 August 2011 that Mr Bowling would not sell to her. She says she did not understand why it was inevitable that she would be forced to leave her home. She says: "I believed there was a point to proceeding to court; rather than as Friend had advised me. I wanted the chance to find out; wanting to believe that justice would prevail in our legal system. I took that chance to have the opportunity to keep my home, never expecting I would incur Bowling's legal fees. I had sought to compromise on everything and to have my lawyers negotiate …" (original emphasis)
She then goes on to explain why it was in her view that she was ultimately unable to purchase Mr Bowling's interest and provides further commentary on the valuation processes, the processes leading to sale and a number of those criticisms which she makes throughout her very lengthy affidavits.

The conduct of the original proceedings

In order to comprehend what occurred between the time of the principal judgment and the costs hearing, it is necessary to have regard to earlier communications and advice in respect of both the plaintiff and Mr Bowling's attempts to settle the principal proceedings.
The plaintiff retained the first defendant on or about 14 May 2010. Prior to the commencement of the original proceedings, the first defendant provided advice to the plaintiff in respect of a number of issues, including whether her mother had a caveatable interest over the property and the notice of severance of joint tenancy from the Land & Property Management Authority.
The original proceedings were commenced by the first defendant on behalf of the plaintiff on 11 August 2010. The plaintiff sought orders in respect of an injunction as well as property settlement orders. The application for an injunction was heard by Gzell J on 13 August 2010 and an injunction was obtained. On 20 August 2010 the second defendant was briefed to provide advice in relation to the Relationships Act issue.
On 21 September 2010 Mr Bowling filed a defence and cross-claim. In his cross-claim he sought orders that the Macmasters Beach property be sold at a reserve price of $1.5 million; that the mortgage be discharged; that the loan to the plaintiff's mother be discharged; and the balance be divided equally between the plaintiff and Mr Bowling.
The first defendant recommended to the plaintiff that a valuation should be obtained on the property. On 20 December 2010, Scott McMonigal provided a valuation report assessing the market value of the property at $1.125 million. A valuer obtained on Mr Bowling's behalf assessed the property at $1.35 million. The plaintiff did not agree with either of those valuations.
An unsuccessful mediation took place on 22 December 2010.

The January Offer of Compromise

On 18 January 2011, Mr Bowling served an Offer of Compromise to the effect that he would accept 40% of the net asset pool having regard to his version of the balance sheet (the January Offer of Compromise). One of the matters that features in the contemporaneous documentation and indeed in these proceedings is the differing balance sheets.
The plaintiff and Mr Bowling had different ideas as to the assets and debts and the plaintiff believed that was something which needed to be worked out before there could be any settlement. She continues to emphasise this in these proceedings, including in her submissions received after the end of the case. It is a common theme. She believes that the defendants failed her in not doing what was necessary to achieve a settlement that would have allowed her to keep the property.
The first defendant provided a copy of that offer to the second defendant and the plaintiff. The first defendant wrote to the plaintiff on 19 January 2011 enclosing the letter and referring to a telephone conversation he had with the plaintiff on 18 January 2011.
Prior to forwarding the letter of advice on 19 January 2011, the first defendant discussed Mr Bowling's offer with the second defendant. This is evident from a handwritten file note taken by the second defendant dated 19 January 2011. The second defendant said to the first defendant that the offer was in the ballpark and that the client should be advised of this and of costs issues.
In his letter to the plaintiff, the first defendant noted the plaintiff's instructions that she did not have the sum sought of $466,884 to pay Mr Bowling. He also referred to extensive discussions between the plaintiff, himself and the second defendant at the mediation to the effect that the offer made was within the range of the likely outcomes. He said: "Given the costs consequences I urge you to give serious and thoughtful consideration to the offer … You should at the very least consider making a counter offer on the basis of Uniform Civil Procedure Rules of compromise. On the material available at the moment counsel is of the view that the offer is within range a Court may give you …"
He also said that on the information available to him there was no realistic option of the plaintiff buying out Mr Bowling and it was quite clear that Mr Bowling was not going to accept anything like her proposal of 80% to her and 20% to Mr Bowling. He sought her further instructions.
The plaintiff responded on 20 January 2011 in an extensive email. She provided information about a number of matters relating to the issues with Mr Bowling. She also said: "Regarding their offer and possible costs to me from proceeding to hearing and losing - I wish to proceed as at the end of the day the money that is left is I hope to be left to our children. It does not make my life much different. He now has a valuable asset in [W]endy's house - 2 newly-built homes which she built on vacant land in Glenbrook. My counter offer cannot change much; can [I] get a further opinion from another barrister who may see that I have a better chance - not regarding costs in the equation? What is likely to be total cost from proceeding to court? … I do not understand the percentages entirely but in any case I do not accept this offer and would like to know if having the centrelink documents will make any difference to your point of view. I need to know apart from costs why the barrister does not see that [I] have a strong case …"
Three things emerge from that email being: 1. The plaintiff must have read the advice about the offer and the costs risks to her; 2. She was instructing the first defendant that she wanted to proceed as the risk of paying costs to Mr Bowling would not make much difference to her; and 3. Although she said that she did not understand the percentages entirely, even despite that she did not wish to accept the offer.
There followed a further email from the plaintiff regarding offers and a response from the first defendant to the plaintiff copying in the second defendant.
It is, in my view, clear from the January 2011 documentation, that: 1. The first defendant provided both oral and written advice to the plaintiff about Mr Bowling's offer; 2. The first defendant spoke to the second defendant about the offer prior to providing the written advice; and 3. The first defendant advised the plaintiff that the offer was within a range that Mr Bowling might achieve and that the plaintiff would be well-advised to make an offer herself and that there could be costs consequences arising out of the rejection of Mr Bowling's offer.
It is important also to observe that this offer was made following a mediation at which advice was given and settlement was discussed.
On any view of the correspondence, the plaintiff was given appropriate advice about the January Offer of Compromise and the steps that needed to be taken in response to the offer. It is plain from the plaintiff's own words that she did not wish to make a counter-offer along any lines suggested by the first defendant.

The further offers

Over the next four months work continued on the case including finalisation of the plaintiff's affidavit with the assistance of the second defendant.
Then on 13 May 2011 the first defendant sent an email to the plaintiff (copying in the second defendant) seemingly in response to a phone call from the solicitor for Mr Bowling regarding settlement. He referred to Mr Bowling's solicitor being concerned about costs and wanting a counter-offer from the plaintiff. He asked the plaintiff to get back to him with her instructions about making a sensible offer. The plaintiff responded by saying she wanted to see Mr Bowling's affidavit before making a further offer of 70% to her and 30% to Mr Bowling.
As well as other matters, the first defendant responded immediately referring to a conversation he had just had with the plaintiff including the following: "…2. I confirm your advice that you do not accept our advice for you to make a reasonable offer. You instruct that you do not wish to make an offer under any circumstances and want the litigation to run unto its end. 3. You have obtained under FOI Centrelink records pertaining to yourself but have not gone through them, nor sent them to me. 4. You do not now wish to instruct another counsel for an alternate opinion about the matter. My advice is that given the great volume of material such an alternate opinion will cost about $5000.00. 5. You can not afford to buy out Darryl Bowling's share of the Macmasters property no matter what valuations of the property are accepted. 5. My advice to you that it is counsel's opinion that going as best as you possibly can in the litigation you can not achieve more than 65% of the asset pool and most likely you will achieve significantly less. 6. You do not appear to accept our advice about your prospects in the matter but wish to continue instructing myself and Mr [Paterson] in any event …"
On 27 May 2011 the plaintiff again wrote to the first defendant who responded in the following terms: "Dear Judith, Your instructions are not good enough. You must provide the documents sought. Otherwise you will get cost orders against you ordered by the Court. Please advise how much money you would be prepared to spend on an opinion of a female barrister [forthwith] (I will then seek to [obtain] a second opinion). Your suggestion that you put in an offer 70/30 is frankly unrealistic. In any event can I take it that they are your instructions if they are we should put that offer straight away (it is not going to be accepted in any event but it is a good idea if you want to put an [offer] to put it early or on rather than just before the hearing). [There] is an urgency to this matter because this matter will be set down for hearing as soon as the [Defendant's] evidence has been filed. Mr Paterson has advised me that his opinion is that he should put an offer of 65/35. You should also clarify your position about whether you are in any way able to pay out Mr Darryl [Bowling's] share of Macmasters Beach property or not. Please reply by immediate return and please advise when you shall get the documents together. The matter is next in Court on the 7th of June 2011 for directions and I am of the view that cost orders will be made against you. Regards, Stephen Friend"
There followed further exchanges between the first defendant and the plaintiff. The first defendant says in these proceedings that he was concerned that the plaintiff was refusing to accept his advice as to the likely outcome in the proceedings and was failing to provide clear instructions to him.
On 3 June 2011 he sent an email to the plaintiff stating: "… If not and you keep refusing to accept our advice I see real problems in you continuing to instruct us …"
No offer was made at that time. After finalisation of a further affidavit on behalf of the plaintiff there followed the exchange of further correspondence in respect of the first defendant's requests and the plaintiff's difficulties in complying with them and issues as to fees and what the plaintiff wanted.
On 22 June 2011 the first defendant wrote to the plaintiff informing her that the matter had been listed for hearing and stating: "If you can not afford to pay out D [B]owling you should advise us now as this will save expert fees as the property will need to be sold anyway."
On 24 July 2011 the plaintiff sent an email to the first defendant canvassing a number of issues, particularly relating to the way in which the property would be valued and the percentage contributions. Inconsistently with that which she has maintained in these proceedings, she stated: "… However, based on what I think I know • I am not seeking an order to buy out the [defendant's] interest in the property. • I therefore am not relying on the valuation unless there are costs implications…"
It is clear from my review of the extensive material that the plaintiff was pursuing a strategy which involved trying to buy out Mr Bowling for the least amount possible (as she was entitled to do). She would not accept the valuation evidence (as it was too high) and had spoken to another agent who she said would list it at a lower price.
I am not sure why a homeowner would want a property listed for sale at a lower price unless there was an intention to benefit from that in some way. There is perhaps a hint as to her strategy in her evidence/submissions. She refers to the property being listed with an agent at $1.2 million and her mother then buying it at $1 million. This may explain why she wanted it listed at a lower price than either valuer suggested it was worth. This also explains her unwillingness to make offers based on percentage contributions. She would be locking herself into a price that she did not wish to pay.
In any event it is only necessary to say that the exchange of correspondence with the first defendant during this period demonstrates that the plaintiff was intent on pursuing her own strategy rather than merely following any advice given by the first defendant.
The first defendant responded with further advice in response to that email, again, dealing with valuations and percentages. In particular, he said: "I cannot determine the percentages for you as the Court does that. Mr Paterson and I have advised you that the Defendant's offer to you is reasonable and that you should put an offer to the Defendant of no more than 65% of the asset pool to yourself and 35% to the Defendant. This may result in the Defendant increasing their offer slightly on his present position. It is likely that you will get a big costs order against you if the Defendants offer is more than the Court determines at trial. The Defendants costs at the end of the hearing will probably be in the region of $50,000.00 to $60,000.00 …"
At some stage in early August 2011, the first defendant must have spoken to the second defendant about the best approach as he subsequently sent an email to the plaintiff noting that the second defendant advised that even though the plaintiff was unable to buy out Mr Bowling, the Court needed to arrive at a value of the asset pool. This must have been in response to the plaintiff's idea that the matter proceed without any independent valuation.
The plaintiff then provided instructions to the first defendant to make an offer on the basis that the property be sold and, after payment of expenses and the loan from the plaintiff's mother, the proceeds of sale would be distributed 75% to her and 25% to Mr Bowling. That offer was put orally by the first defendant during a discussion with the solicitor for Mr Bowling on 2 August 2011. This offer was not in the range that the first and second defendants had been suggesting. Again, it is apparent that the plaintiff was not prepared to accept the advice of the defendants over her own views as to how to achieve the best result for her.
The solicitors for Mr Bowling responded almost immediately rejecting that offer and putting a further offer which included the property being sold at an agreed price or if no agreement is reached, at $1.3 million; that all expenses be deducted, including that the $125,000 be paid to the plaintiff's mother; and that Mr Bowling receive 35% of the net balance then remaining.
As part of this offer, Mr Bowling accepted that the sum of $125,000 was owing to the plaintiff's mother. The offer was put by way of an Offer of Compromise and served on 9 August 2011 (the August Offer of Compromise).
The first defendant sought the second defendant's advice on the offer. The second defendant responded saying: "If our client is not minded to accept the offer, at a minimum she should put her 70:30 offer."
On 11 August 2011 there was a telephone discussion between the plaintiff and the first defendant. The first defendant says he does not have an independent recollection of the discussion. In his letter of 11 August 2011, the first defendant referred to that discussion. He noted that the plaintiff had sent an offer to Mr Bowling directly. He further said: "Counsel and I both advise that the defendant's offer should be accepted and I note you reject that advice. I further note that you advise that you do not care if you are significantly worse off financially but you want to go to hearing even though you will be worse off. I confirm [you] will attend our office tomorrow at 12 noon and provide written instructions in relation to the offer set out in in the defendant's solicitor's letter of 9 August 2011."
The plaintiff's response was to suggest a counter-offer on the basis she would purchase Mr Bowling's interest in the property by a payment of $200,000 and he would retain a remainder interest in the property for five years. The first defendant responded suggesting he did not understand the offer. He sought an extension of time to respond to Mr Bowling's August Offer of Compromise and then arranged a conference with the second defendant.
At the conference, the first defendant provided the plaintiff with a written direction to reject Mr Bowling's August Offer of Compromise in accordance with her earlier instructions. She refused to sign it.
Following that conference, the first defendant sent an email to the plaintiff confirming her instructions that she refused to sign the attached direction to reject Mr Bowling's August Offer of Compromise and that she refused to provide instructions in writing.
Further, the first defendant specifically said that he did not accept her suggestion that she did not understand Mr Bowling's offer as they had just conferred for six hours during which time they went through the offer. He said in his email: "At the end of the day I can only repeat that you will in my opinion be [significantly] worse off financially, given the length of the relationship and the contributions of each party to the relationship. I am clearly of the view that you should accept the offer as the Court will not in my opinion award you as much as 65% of the Macmasters Beach property."
Again, it is a common theme between the original proceedings and these proceedings that the plaintiff would maintain a lack of understanding in response to direct and simple propositions with which she did not agree.
Included in the evidence is a copy of the direction to reject the offer of settlement and a copy of the first defendant's email which both contain handwriting (presumably of the plaintiff) suggesting that her lawyers clearly wanted to go to Court and questioning whether they were capable of representing her in a positive manner.
There followed further correspondence leading to the first defendant preparing a draft offer involving a payment of $200,000 to Mr Bowling with a further $150,000 within 5 years. The plaintiff, again, sought clarification and in the meantime the second defendant provided advice in relation to the preparation of the matter.
The plaintiff then provided her own amended spreadsheet with instructions to put an offer which would involve her paying $200,000 to Mr Bowling and $100,000 in five years. The first defendant put that offer in accordance with her instructions in a letter dated 12 September 2011.
The solicitors for Mr Bowling responded saying that they were unable to advise Mr Bowling as to the effect of the plaintiff's offer due to a number of issues or conditions relating to the offer including the balance sheet.
On 14 September 2011 the first defendant advised the plaintiff that her offer had not been accepted. The hearing commenced on 28 September 2011 and concluded the next day.
It is again clear from the contemporaneous documents that the plaintiff was not willing to accept the defendants' advice about settlement in the period leading up to the hearing and in particular she rejected the advice (which was clear and in writing) about Mr Bowling's August Offer of Compromise. She had her own views as to how much she wanted to pay Mr Bowling.
It is notable that on the hearing Mr Bowling sought an order that the property be sold immediately, the value at this time having been agreed at $1.25 million. The second defendant (on behalf of the plaintiff) opposed, informing the Court, consistent with what the plaintiff has said in this case, that the plaintiff would like the opportunity to raise funds in order to purchase the defendant's interest. Any suggestion (which has been raised by the plaintiff in her evidence in these proceedings) that the defendants were not complying with her instructions that she wished to keep the property would be quite inconsistent with the submissions made by the second defendant on her behalf at the original hearing.

Conclusions as to pre-hearing conduct

Whilst there is no allegation of negligence in respect of any pre-hearing work undertaken by the defendants, it has been necessary to review the evidence in respect of attempts to settle the matter having regard to the way the plaintiff presented the case and, in particular, her suggestions that she had not been properly informed or understood what was happening prior to the costs offers being made and subsequent to the delivery of the judgment.
The plaintiff's suggestions that she had not been properly advised about the Offers of Compromise and settlement generally were taken up with her in cross-examination: "Q. You knew from previous letters of offer and advice given to you that Darryl's lawyers had been threatening you, at times, throughout the litigation that they would be asking you to pay his costs if you didn't get a better outcome than various offers that he made. A. We could go back to the ‑ I'll answer in a non‑direct way ‑ if we could go back to the July email that you showed the Court earlier where he's encouraging me to get the value set by the Court and I was relying on that part of that email because we didn't have a mutually agreed value. So, I understood that the Court would set a value and justice would prevail and, in that context of understanding, let me answer your question ‑ what was said, I'm sorry. Q. Sorry, you want the question again? A. Yes please. Q. You knew that on previous occasions Darryl, through his lawyers, had threatened that, if you didn't accept offers that he was making, they would be seeking an order that you pay his costs. A. No, not directly. I just have to say ‑ I have to answer that because my lawyers weren't informing me correctly and I've come to think, through working on this matter, that, because my lawyers were conveying to me that he wouldn't sell to me, that perhaps his version of it is not that at all. Perhaps he was willing to sell me but my lawyers weren't telling me correctly because of the maths of the offer and I guess now that, if I had accepted to be the buyer and the buyer had to pay the debt to mum, it would have been different but that's not what was conveyed to me. Q. On earlier occasions you'd considered and rejected advice given to you by Mr Friend about settlement. A. No, we had that ‑ you asked me about that earlier and I said to you the percentages were never the issue. I tried to be negotiable, compromised. Back in January I said yes to Mr Paterson suggesting 70/30. Never did they discuss with me who was going to pay the debt and how that altered the percentages that were being thrown around between Darryl's lawyers and mine. I had no understanding of that at the time. Q. And, you considered the advice you were given on the morning outside court on 15 December and you decided that you wanted to reject the $23,000 offer. That's what happened; isn't it? A. Yeah, I ‑ I ‑ you know, I've already said what I've said and I am an honest, truthful person to a fault. Being autistic, that's another trend of autism is that you're honest to a fault of bringing ..(not transcribable).. yourself. I'm telling you there was no conference before the judgment was delivered."
I accept that: 1. The plaintiff was urged to seriously consider settlement on a number of occasions in 2011 prior to the hearing; 2. The plaintiff was advised that there could be costs consequences for her should she not do better than the January Offer of Compromise; 3. She was given more direct advice that she should accept the August Offer of Compromise, including advice about the costs consequences of not accepting the offer; 4. The plaintiff declined to accept the advice of the defendants in respect of settlement of the proceedings and declined to sign a document confirming that she would not accept the advice to accept the August Offer of Compromise, even though it was clear that she was not accepting the advice; and 5. Whilst the plaintiff had indicated that her intention and desire was to keep the property, she gave inconsistent instructions to the first defendant about that and, in particular, about her capacity to raise the finance to keep the property.
Contrary to her evidence in these proceedings, she plainly understood the effect of the advice given by the first defendant and in part by the second defendant as to the offers made by Mr Bowling and what sort of an offer she should be making. It is just that she continued to challenge it because she did not agree as to the calculations and conditions and did not wish to settle in the range suggested.

The costs' offers

On 7 December 2011 judgment was delivered.
Associate Justice Macready acknowledged that the plaintiff wished to purchase Mr Bowling's share of the property and that he would allow her 21 days in which to come to an agreement to purchase the defendant's interest and discharge the liability to her mother. As his Honour said, failing that, the property would be sold.
It must be that following the judgment, the defendants discussed costs issues.
On 8 December 2011 at 7.30pm the second defendant sent an email to the first defendant referring to their conversation wherein the second defendant said he would compare the January Offer of Compromise with the judgment. He said that he did not have the "latest offer", that is, the one with the 65:35% split. However, he referred to having a preliminary chat with Mr Bowling's counsel. Mr Bowling's counsel did not know about any offers of settlement. The second defendant suggested to Mr Bowling's counsel that each party should pay their own costs.
In other words, the second defendant had proactively already raised with counsel for Mr Bowling the prospect that the appropriate costs order would be each party should pay their own costs. This was an attempt by the second defendant to achieve the most favourable outcome for the plaintiff on the question of costs.
On 9 December 2011 the solicitor for Mr Bowling wrote to the first defendant and indicated that Mr Bowling would be making an application for costs pursuant to r 42.15A of the UCPR on the basis of the August Offer of Compromise. It was suggested that Mr Bowling would be seeking indemnity costs from 10 August 2011.
Included in that letter was Mr Bowling's first costs offer, being an offer to accept the sum of $30,000 on account of costs even though he identified his costs as being $123,000.
The first defendant says that on 9 December 2011 he provided the second defendant with a copy of the first costs offer by facsimile. He says that the purpose of forwarding the letter to the second defendant was to seek his advice in relation to the costs offer.
The first defendant also says that he had a conversation with the plaintiff on 9 December 2011 about the first costs offer although he does not have an independent recollection of the precise words spoken. He says that he informed the plaintiff that he had sent the offer to the second defendant for advice.
On 11 December 2011 the plaintiff sent a further email to the first defendant attaching two documents dealing with issues relating to finance and the possibility of her mother assisting her and purchasing Mr Bowling's interest (her mother was in hospital at the time).
On 12 December 2011 the second defendant wrote to the first defendant providing a draft letter suggesting he should write to Mr Bowling's solicitors in the terms of the draft letter. The draft letter includes argument as to why the orders proposed by Mr Bowling in respect of costs would not be appropriate and that the plaintiff would consent to an order that each party pay their own costs of the proceedings. The draft letter also contained arguments raised as to why Mr Bowling was incorrect in suggesting that the orders made were less favourable than the August Offer of Compromise.
The plaintiff was provided with this draft letter because at 6.56pm on 12 December 2011 she forwarded an email to the first defendant which included the following: "Thankyou for the attached letter re costs asking that each party pay their own costs - is it remotely possible that the judge can award a more favourable outcome? I trust the advice from Mr [Paterson] and therefore will not accept the offer of compromise from Paltos. I asked you earlier today to discuss the figures in the Orders …"
The plaintiff says that she spoke to the first defendant on 12 December 2011. The first defendant agrees.
The first defendant does not now recall the precise words spoken but he says the plaintiff instructed him that she was not prepared to pay any amount to Mr Bowling for costs and wished for the matter to be determined by the Court. He says that he requested that the plaintiff provide written instructions in relation to the costs offer. This would be consistent with her general approach to responding to Mr Bowling's offers prior to the judgment.
At 9.56am on 13 December 2011 the first defendant followed up the plaintiff via email, stating: "Please give us your immediate instructions in respect of costs. Please confirm we put Andrew [Paterson]'s suggested offer and you reject Daryl's offer. (I note that Andrew [Paterson]'s advice is that the costs re the severance will be the costs in the cause that means the costs are the same as the rest of the proceedings). Please instruct us whether you wish to offer to buy Darryl's share of Macmasters Beach …"
He says that in accordance with her instructions, he sent the letter drafted by the second defendant to Mr Bowling's solicitors. He forwarded a facsimile copy of that letter to the second defendant on 14 December 2011.
There is some uncertainty as to who was providing advice to the plaintiff about the first costs offer and what the advice was. The first defendant says he sought the second defendant's advice on the first costs offer. He refers to receipt of the letter from the second defendant incorporating a draft to be sent to the solicitors for Mr Bowling as the costs' advice.
The second defendant says that he was not asked to provide any advice on the reasonableness of the first costs offer. Rather, he says he provided draft correspondence for the purposes of responding to that first costs offer. He says he specifically used the words "subject to instructions" as he was not intending to give advice in the letter but really to provide a draft letter on the assumption that the plaintiff would not accept the first costs offer. He says that he recalls at the time that he had been told that the plaintiff was not prepared to pay any amount to Mr Bowling for costs.
Further, the second defendant says that he was not privy to any conversations between the first defendant and the plaintiff about the first costs offer and he was not provided with copies of any emails between the first defendant and the plaintiff about the first costs offer. He says he did receive a copy of the letter which had been sent to the solicitors for Mr Bowling and understood this to indicate that the plaintiff had provided instructions to reject Mr Bowling's first costs offer.
The subject of the conversation about the first costs offer was taken up in cross-examination of the plaintiff on behalf of the first defendant. The plaintiff seemed unwilling to accept that there was any conversation between her and the first defendant about the first costs offer on 9 December 2011.
It was then put to the plaintiff that the first defendant sent her the letter drafted by the second defendant as follows: "Q. What you're saying is Mr Friend sent you a letter drafted by Mr [Paterson] to go back to Darryl's solicitors? A. Well, I don't think it was a draft. I got told, "This is his advice. This is what we're going to tell the other party and what we're going to send." I didn't question. I simply got told, "This is, you know, what you need to do because he's asking 30,000 of costs and we're advising not to accept that." I couldn't make sense ‑ actually, I couldn't make sense of anything in that submission. And I remember saying to him, "I can't follow anything in this. It makes no sense to me," and that's why I wrote what I wrote at 6.56 that night; that I trust Mr [Paterson], if he's written this and this is what he's saying, then, whatever. Q. On 12 December 2011, I suggest that you had a conversation on the telephone with Mr Friend. Do you remember that? A. Well, I beg to differ about the time of that telephone conversation."
It was also put to the plaintiff that she had a conversation with the first defendant at that time and that she said she was not prepared to pay any amount to Mr Bowling for his costs as follows: "Q. ‑‑you told Mr Friend that you were not prepared to pay any amount to Darryl for his costs, and you wanted the matter to be determined by the judge? A. No. That's his version. HIS HONOUR: I'll just interrupt there, in the interests of unrepresented. Q. What's your version? A. As I just said, I couldn't understand the whole costs process, and said, "I will trust your judgment in all of this." I‑‑ Q. You deny telling Mr Friend that you didn't want to pay any amount to‑‑ A. For costs. Q. ‑‑Darryl, and‑‑ A. Can I‑‑ Q. Hold on a minute. I'm just trying to help you out here, Ms Odlum‑‑ A. Yeah. Q. I want to give you an opportunity to say your version, as you're not legally represented. Mr Lloyd is putting to you, you told Mr Friend you didn't want to pay any amount towards Darryl's costs. You said, "That's his version"? A. Yep. Q. I asked you what your version is. You said your version is you told him you'd trust his judgment. Is that what you're saying? A. I trust Mr [Paterson]'s judgment. No, I didn't trust‑‑ Q. Did you say those words to him? A. Yes, it's written in an email. It's filed ..(not transcribable).. actually. It's part of the statement of claim. Because I said ‑ navely, not being able to understand it ‑ I mean, I see it all differently now, now that I understand what's in that. I see the situation very clearly, and it's no wonder I couldn't understand it at the time. Q. You told him in response to his advice, "I trust your judgment"? A. I trust Mr [Paterson]'s judgment, not Mr Friend's‑‑ Q. Mr [Paterson]'s judgment, okay‑‑ A. Yes."
The difficulty in making findings as to precisely what was said by whom about the first costs offer is that there were two conversations between the plaintiff and the first defendant, being on 9 and 12 December 2011, and then there may have been another conversation between the first and second defendants about the first costs offer.
The second defendant may have been right in understanding that the plaintiff did not wish to pay any amount to Mr Bowling on account of costs. That understanding would be consistent with what the first defendant says the plaintiff told him, although it is not clear on the evidence how the second defendant found out about that. This may explain why which he simply prepared a draft counter-offer.
It may also be that the first defendant did not provide any independent advice to the plaintiff about whether she should accept the first costs offer, merely passing on what both the plaintiff and the first defendant took as the second defendant's advice, that is, to put a counter-offer.
All of this leads to the conclusion that the plaintiff was not advised to accept the first costs offer but was advised to make a counter-offer. This is what occurred.
Later, during cross-examination, the plaintiff was referred to her email of 20 December 2011 in which she offered a commentary on both the principal judgment and the costs judgment. She was raising an application under the slip rule because she considered that there had been an error in the judgment.
It was put to the plaintiff that in her subsequent email of 20 December 2011 she did not raise any complaint about the advice given on the costs offers: "Q. I want to suggest to you that nowhere in this document did you complain that Mr Friend or Mr Paterson had given you advice to reject the offer of either 30,000 or 23,000 Darryl had made for costs. A. I don't think I understood what was happening. Q. Do you ‑ by that ‑ I'm sorry, you go on. A. I don't think I would have written eight pages if I had known. I was searching for explanation of everything. Q. Well, I want to suggest you weren't making any complaint that they had given you advice to reject either of those offers because you knew very well that they had not given you any advice of that kind? A. You're conflicting now ‑ it's trying to trick me up. There is a two ‑ two things here in your question. One is the costs offer; the other one is the slip between the judgment and the orders. My ‑ my barrister hadn't even used the figures in the judgment. I had never ever been told the real interpretation of paragraph 142 of the judgment which ‑ in which I had done better. He relied on 143 and a sale and misled the Court about a sale by using 143 and the figures in 143. I hadn't worked all that out at the time; I knew nothing."
Whilst I do not accept that the plaintiff had the lack of understanding that she maintains for the purpose of these proceedings (that is often referring to being unable to understand simple English and concepts in correspondence), I accept that she instructed the first defendant to reject Mr Bowling's first costs offer and that she took the draft letter from the second defendant as advice to do so.
She has thus established part of which she asserts in the Statement of Claim being that she was advised to reject the first costs offer. I also accept the first defendant's evidence that the plaintiff had told him during discussions about the first costs offer that she did not want to pay any amount to Mr Bowling on account of costs.
The question which arises is thus whether she should have been given that advice.
The plaintiff's submissions on this issue are confused. Her principal response is that she disagreed with the statements of the first defendant as to the similarity between the August Offer of Compromise and the judgment. She says that the defendants did not acknowledge or understand the compromise value of the offers. She says that the August Offer of Compromise had been based on a figure of $475,825 whereas the judgment for his share was actually $449,879. She says these figures were not used in the submissions by Mr Paterson to the Court and they were not disclosed to her to allow her to make an informed decision about costs.
She says the judgment really reflects a contribution of 31% to Mr Bowling (unlike the orders) and that was comparable to the offer she says she had made on 12 September 2011. She says that the figures reflect that she had done better as a result of the judgment than Mr Bowling.
These submissions do not really help the plaintiff as she is not pursuing and is not entitled to pursue a case against either the first or second defendant based on any error or failure in the submissions they made to the Court on the costs hearing.
Her submissions provide justification for her rejection of the costs offers. However, it is difficult to understand how she can maintain that the defendants were negligent in advising her to reject the first costs offer if her real position is that Mr Bowling's Offers of Compromise were not better than or close to better than she achieved in the judgment. Perhaps her submissions are reflective of her grievance that there are aspects of the judgments that are wrong. She blames her lawyers for that.
The plaintiff's submissions as to her belief about the costs offers adds credence to the first defendant's evidence that the plaintiff told him that she did not want to pay any amount to Mr Bowling. I accept that evidence. Criticism of the content of the advice about the first costs offer is thus somewhat hollow when the plaintiff would not have agreed with any advice that she should accept the offer. Further, the arguments raised by the second defendant in his draft letter were available and might have been accepted by the Court.
In any event, the rejection of the first costs offer had the desired effect. On 14 December 2011 Mr Bowling responded with the second costs offer, being a reduced offer agreeing to accept $23,000 on account of costs. Whether the defendants should have provided more direct or more specific advice about the risks of not accepting the first costs offer is somewhat academic. Mr Bowling made a lower offer.
At 5.33pm on 14 December 2011 the first defendant advised the plaintiff of the second costs offer. He included in his email advice from Mr Bowling's solicitor that if the plaintiff paid the sum of $370,720 and discharged the liability to her mother, Mr Bowling would transfer his interest in the property to the plaintiff.
There is a dispute between the plaintiff and the defendants as to whether any advice was given about the second costs offer prior to the costs hearing on 15 December 2011.
The first defendant says that the following occurred on the day of the costs hearing: "Prior to the commencement of the hearing Mr Paterson, the plaintiff and I had a short conference in a conference room at the Supreme Court. I do not recall the precise words spoken at the conference and rely upon my contemporaneous file note. A copy of my handwritten file note is contained at pages 525-527 of Exhibit SJF. A typed script of the file note is contained at page 528 of Exhibit SJF. During the conference the plaintiff confirmed she received my email the previous day in relation to the defendant's counter offer of $23,000.00 and provided instructions that she would not accept paying the defendant $23,000.00 in costs. Mr Paterson advised the plaintiff that costs were discretionary and the defendant's offer of 9 August 2011 was very close to what was ordered after a hearing. The plaintiff did not wish to make any offer on costs. The plaintiff did not provide any instructions in relation to seeking to purchase the defendant's interest in the Property pursuant to the Court orders. The plaintiff instructed Mr Paterson to defend the costs application. The costs application proceeded to hearing before Associate Justice Macready. Following the hearing his Honour ordered that the plaintiff pay 75% of the defendant's costs on an ordinary basis for the whole of the proceedings. A copy of the judgment on costs is contained at pages 529-537 of Exhibit SJF."
The second defendant says: "My recollection is that at some time, probably prior to my appearance on 15 December 2011, or possibly by telephone, either Ms Odlum or Mr Friend told me that Ms Odlum would not accept the Bowling's further costs offer and that she would not make a counter offer. I considered that this was a very unwise position and conveyed that I was concerned that there was a risk that Ms Odlum would be ordered to pay a greater amount of costs because in ay court proceeding costs are to some degree discretionary and because of the similarity between Mr Bowling's August 2011 offer and the ultimate judgment. On 15 December 2011, I appeared before Associate Justice Macready at the argument in respect of costs of the Separation Proceeding. After hearing argument, Associate Justice Macready delivered an ex tempore judgment. After the costs judgment had been delivered, I had a conference with Ms Odlum and Mr Friend in which I advised about the effect of the costs judgment."
The first defendant refers to a handwritten file note that he says was made on 15 December 2011, which records and reflects the advice given on that day prior to the commencement of the hearing.
The plaintiff says that there was no conference with her prior to the commencement of the costs hearing and that the file note records what she was told after the hearing.
The advice that the first defendant says the plaintiff was given was put to her in cross-examination as follows: "Q. I suggest to you that Mr Paterson also said to you that he was concerned that there was a risk that the judge would order you to pay a greater amount of costs than the offer of $23,000. A. Again, I can only say this all was ‑ that the handwritten notes that he's made that he uses as evidence is the context of the meeting after the judgment and I know that with certainty because it's using the precise words that Justice Macready used in his judgment. Q. And, I want to suggest that the instructions that you gave to Mr Friend before court on 15 December were that you would not accept the offer made by Darryl of $23,000 for costs. A. Ditto, no meeting before. Q. And, that you gave instructions that you would not accept that offer and you would leave if it in the hands of god. A. Yeah, well I read that too. No meeting before. Q. At no time were you given advice by Mr Friend or Mr Paterson to reject the offer of $30,000 or $23,000 that Darryl had made for costs. A. Yes, I was. That was the point of the costs submission, that I couldn't understand. I was being told that ‑ that's why they wrote the costs submissions because I was being told that I would win on costs, not to pay it and to wait until after the costs hearing."
The file note is all in handwriting and purports to record both the discussion prior to the commencement of the hearing and the result of the hearing. Merely examining the file note does not provide an answer as to the differing recollections of whether advice was given about the second costs offer.
The first defendant's evidence in these proceedings has been generally consistent with contemporaneous records. The plaintiff's evidence has not always been. She has denied things which were obvious and was sometimes evasive in cross examination.
The first defendant's records demonstrate that he was always prompt in advising the plaintiff about any offers. The plaintiff was present in Court on the day of the hearing. It makes no sense for the first defendant not to have discussed the second costs offer with her, particularly when he had sent it to her the evening before and it is clear that he believed that she should be seriously considering the costs offer. The first defendant's oral evidence as to what happened on the day is consistent with the evidence of the second defendant and corroborated by the file note.
Further, as was put to her in cross-examination, she did not complain in her email to the first defendant on 20 December 2011 about any failure to advise about the costs offer. She said in cross-examination that this was because she did not understand what had happened. I reject that as just another statement by the plaintiff when faced with adverse contemporaneous documents that she did not understand (when the contrary is clear from the document).
I accept the first defendant's evidence about the conference taking place before the costs hearing rather than after it. I also accept his evidence about his file note.
As will be apparent from this judgment, I am satisfied that the plaintiff's strategy in the proceedings in 2011 was to buy Mr Bowling out or purchase the property on a sale but not at the value suggested by either of the valuers. This explains her unwillingness to commit to an offer in percentage terms, other than one more favourable to her than she had been advised was achievable and her instructions to only make an offer of a payment of a specific sum to Mr Bowling prior to the hearing.
Further, I am satisfied that she was unwilling to accept the advice of either the first or second defendant to make a reasonable offer of settlement prior to the hearing as that would have involved committing to a percentage contribution based on a higher total value than she was prepared to accept. The contemporaneous file notes of the first defendant reflect the plaintiff's willingness to allow the matter to go to Court despite any costs which associated with not accepting the Offers of Compromise put by Mr Bowling.
The evidence of the first defendant as to the plaintiff's response to both the first and second costs offers is consistent with the general instructions of the plaintiff about her unwillingness to pay sums to Mr Bowling during the course of the matter. It is notable that the advice that she did accept was the advice which I am satisfied was given to her, at least indirectly through the draft letter provided by the second defendant, being to reject the first costs offer. She accepted that advice not to accept an offer in respect of costs from Mr Bowling. It appears to have been the only advice about paying money to Mr Bowling that she accepted throughout the matter.
I reject the plaintiff's complaint that the defendants failed to exercise reasonable care in not providing any advice about the second costs offer. They provided advice as to the risks of not accepting the offer, being an adverse costs offer.
Further, the requirement to give advice at that time, that is, immediately prior to the costs hearing, must be considered in light of the conduct of the proceedings as a whole. I have already found that, in particular, the first defendant provided competent and appropriate advice in response to Mr Bowling's Offers of Compromise. He did not owe a duty to compel the plaintiff to accept advice or to settle the case. The advice given in respect of the costs offers must be considered in the context of all the earlier advice to the plaintiff about the risks of allowing the matter to proceed to judgment in the face of reasonable offers by Mr Bowling.
It is notable that, just as the defendants predicted, costs were discretionary. This is not a case in which the offers made by Mr Bowling were so much better than Mr Bowling received from the judgment. His Honour did not so find in his costs judgment. He ultimately exercised his discretion to order the plaintiff to pay a portion of Mr Bowling's costs, having regard to the Offers of Compromise made by Mr Bowling which were not accepted by the plaintiff. This was the very risk of which the plaintiff was advised.
The plaintiff points to the failure of the defendants to put her own offer before his Honour on the costs hearing. She complains that his Honour mistakenly thought she had not made any offers. However, there would have been little point in doing so. There is hardly any point in a party attempting to resist a costs order by demonstrating that the only offer which had been made by that party was below that which the other party had achieved as a result of the hearing.
It is not necessary that I refer to the plaintiff's evidence/submissions as to what happened after the costs judgment in any detail. The plaintiff's grievances are extensive. It is only necessary to say that she did not avail herself of the opportunity to purchase Mr Bowling's share of the Macmasters Beach property in accordance with the values and percentages determined by the Court.
Having regard to all of these reasons, I summarise my findings about the costs offers as follows: 1. The plaintiff was advised about the first and second costs offers prior to the costs hearing; 2. She was advised not to accept the first costs offer but to make a counter‑offer. This is the effect of the second defendant's draft letter and although the first defendant cannot recall the precise words used in his discussion with the plaintiff about the first costs offer, there is no suggestion that he gave contrary advice; 3. She was advised about potential costs risks following the first costs offer but she informed the first defendant that she did not want to pay any money to Mr Bowling on account of costs; 4. The rejection of the first costs offer had the desired effect because it produced a lower offer from Mr Bowling; 5. She was forwarded the second costs offer on the day it was received; 6. On the day of the costs hearing she had a short conference or discussion with the defendants prior to the costs hearing about the second costs offer. She was advised that the costs were discretionary and that the August Offer of Compromise was close to what the Court had ordered. She instructed the first defendant that she did not wish pay the sum of $23,000 to Mr Bowling; and 7. Costs were discretionary and the plaintiff was at risk of an adverse costs offer. It was not clear that Mr Bowling received more than his August Offer of Compromise and Associate Justice Macready did not so find. There was no certainty on the outcome of the costs hearing, albeit the plaintiff faced a risk of an adverse costs order. This is the effect of the advice the plaintiff received.

Causation

The plaintiff deals directly with causation in her submissions under the heading "What would the plaintiff have done if she was given different advice". She submits that it would be illogical to suggest that had proper advice been given, she would not have followed it.
However, she appears to be confused as she then says that "considering that we had gone to [C]ourt for that opportunity as I had to fight my lawyers to do, seen by the document I was asked to sign". She also says she "[does] not agree with … Lloyd's submission, that I would not have taken my lawyer's advice. Once again it goes against logical thinking."
The problem with this submission is that she had not taken her lawyer's advice on a number of issues throughout the conduct of the proceedings. As she says in her own affidavit, she had to fight the lawyers to go to Court. She wanted an opportunity to keep her home and she believed that the way to do that was through the Court rather than settlement.
Further, her evidence/submissions are inconsistent with that which she told the first defendant when informed of the first costs offer. She told the first defendant that she did not want to pay Mr Bowling any money on account of costs.
Her after-the-event opinion as to what she would have done is inconsistent with many of her other submissions, particularly her argument that she in fact did better than the August Offer of Compromise. That is, on the one hand it should have been recognised that she did better out of the judgment than any offer made by Mr Bowling but she also says that the defendants were negligent in advising her not to accept Mr Bowling's costs in accordance with his offers.
The proposition that she would have accepted advice to accept the first costs offer if it had been given to her is inconsistent with her conduct throughout the proceedings and with her view that she in fact did better than Mr Bowling had offered at any stage. It is unsurprising that she so readily accepted the advice to reject the first costs offer in these circumstances.
The plaintiff bears the onus of proving causation (s 5E CLA). In this case, that means proving that if she had been given different advice, that is advice to accept Mr Bowling's first costs offer, she would have accepted that advice. She has not discharged that onus.
In any event, the advice given by the defendants about the first costs offer could not have caused any loss to the plaintiff both because the plaintiff would not have accepted it and it enticed a lower offer.

Conclusion

I am satisfied that the defendants acted with due care and skill and consistent with the conduct of a competent professional solicitor and barrister in advising the plaintiff about the risks of not accepting the costs offers prior to the costs hearing.
I am satisfied that the second defendant merely provided a draft response to the Mr Bowling's first costs offer consistent with what he understood about the plaintiff's position. His draft letter achieved what was intended at least in part as a lower offer followed.
I am also satisfied that the plaintiff was provided with advice about the risks of not accepting the second costs offer.
The plaintiff has not established negligence or any failure to comply with the Fair Trading Act in the advice given by the defendants about the costs offers and thus the plaintiff is not entitled to succeed.
As I have said, despite the extensive documentation and extensive submissions, none of the other issues raised in all these documents are the subject of any pleadings.
I reject the submission made by the plaintiff after the conclusion of the hearing that the defendants were prepared to meet her arguments in any event. That is no substitute for pleading her case.

Damages

Although the plaintiff has not succeeded in her claim, I will assess damages.
The plaintiff's submissions are replete with various quotations and citations as to the proper approach to the assessment of damages. However, the principles to be applied are not complex. The measure of damages would be the sum necessary to restore her to the position that she would have been had the defendant not been negligent but the damage for which she is compensated must not be too remote.
Further, the plaintiff must establish the causal nexus between any alleged losses and the conduct of the defendants, that is, the advice they gave.
In my view, should the plaintiff have succeeded she would only have been entitled to the difference between the amount that she could have paid on account of costs (either $30,000 or $23,000 depending on what alternative findings might have been made) and the amount that she did pay on account of costs which I understand to be $98,000. She would have been entitled to a judgment for that difference being a difference of somewhere between $68,000 or $75,000.
In my view, she would have been entitled to no other sum for the following reasons: 1. The plaintiff did not lose the opportunity to purchase the house because of any negligent advice in respect of the costs offers. Indeed, it is her case that she did better out of the judgment than had been offered to her prior to the hearing and that she always had the finance available, with the assistance of her mother, to purchase the property. In her evidence/submissions she emphasises that after the judgment she would have been able to borrow $560,000 provided that her mother went on title; 2. I accept that she would have been able to organise finance provided that she had the assistance of her mother who says in her own affidavit that she would have done what was necessary to assist in obtaining the finance; 3. The property was ultimately sold. It was sold more than a year after it could have been but there is no indication that any advice given by the defendants about the costs offers impacted upon when the sale took place or the price of the sale. Again, the plaintiff focuses on other issues as to why the property was not sold and why she did not buy out Mr Bowling's share at an earlier stage. The plaintiff has not established that there is any causal nexus between her inability to buy out Mr Bowling at any time between judgment and sale and the advice given in respect of the costs offers; 4. There is no evidence that the property was sold for anything other than market value, albeit that at least in 2011, the plaintiff seems to have done her best to have a valuation agreed at a lesser rather than higher sum and have the property listed at a lesser rather than higher price; 5. The plaintiff did not lose her proportion of the value of the property because it was sold rather than her buying out Mr Bowling; and 6. I do not accept that the property had any special value, such that the value to the plaintiff may not have been reflected by the sale price. The property was sold and she received her proportion in accordance with the judgment.
The other aspects of her claim are simply unsustainable. She says that she was subject to a period of homelessness and that her children have suffered personal losses presumably arising from their inability to stay in the family home. The plaintiff has not established the causal nexus between any negligence of the defendants and these alleged losses. All of these alleged losses are too remote in any event.
Further, I would not accept without evidence that the plaintiff's son had spent lengthy periods of unemployment because of the negligence of the defendants in failing to advise the plaintiff about costs offers in 2011.
The plaintiff may believe that things might have turned out better for her and her family had she been able to remain in the Macmasters Beach property but damages are not assessed on that basis.
The simple point is that, on the plaintiff's case, the failure of the defendants to give her proper advice about the costs offers made in December 2011 meant that the Court was required to make a decision on costs. That decision went against her. This led to her paying $98,000 rather than $23,000 or $30,000. The decision was handed down on the very day that she declined to accept the advice about the $23,000. She was in the same position on the afternoon of 15 December 2011 as she was on the morning of 15 December 2011 except that she had lost the opportunity to settle costs by means of a payment of $23,000 to Mr Bowling.
Her case that everything that has happened to her financially in the following years and even to her children should be linked back to advice given on 11 to 15 December 2011 on whether she should pay any sum for costs, is without foundation.

Orders

I make the following orders: 1. I enter judgment in favour of the defendants. 2. I order the plaintiff to pay the defendants' costs. 3. I grant liberty to apply should any party seek a variation on the costs order.

Endnotes

Bowling v Bowling [2011] NSWSC 1168.
See Odlum v Friend & Anor [2021] NSWSC 577.
Donnellan v Woodland [2012] NSWCA 433 at [88] (Beazley JA); [2012] NSW ConvR 56-307 ("Donnellan"); Lavars v Gillis and Ors [2022] NSWSC 13 at [7] (Campbell J).
See Kendirjian v Lepore (2017) 259 CLR 275; [2017] HCA 13; Attwells v Jackson Lalic Lawyers Pty Limited (2016) 259 CLR 1; [2016] HCA 16.
(2022) 96 AJLR 337; [2022] HCA 11.
Donnellan at [96] (Beazley JA); Lavars at [16]-[20] (Campbell J); Studer v Boettcher [2000] NSWCA 263 ("Studer") at [74]-[75] (Fitzgerald JA, Shelley JA agreeing at [58]).
Studer at [54] (Handley JA). 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: 12 May 2022

At a glance

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Judgment (18 paragraphs)

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Cases Cited (10)

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