Osei v P K Simpson & Co. Pty Limited and Carney

[4]

Facts

The facts in the case were not largely in dispute, except as to: 1. the advice given by the defendants on 29 January 2013; and 2. the plaintiff's ability to prove wage loss for his work as a taxi driver in the period before the assault in March 2010.
I will return to deal with each of these matters separately, but for the most part the facts can be set out in the following chronology.
The plaintiff was born in Ghana and immigrated to Australia in 1989. As at the date of the assault, the plaintiff had 5 dependent children. The plaintiff's first language was Ashanti and at all material times he had a limited understanding of English.
In or about 1997 the plaintiff began an export business called "God is My Saviour Enterprise". The plaintiff collected and purchased second-hand clothing in Australia which he exported to Ghana and sold for a profit.
From about late 2009, the plaintiff also worked 12-hour night shifts as a taxi driver. The plaintiff hired taxis from their owners on a shift-by-shift basis to undertake this work. The plaintiff paid the hire fee and for fuel used in the taxi, and on that basis was entitled to keep any fares collected by him during a shift. For the taxi-driving work, the plaintiff used the same ABN as he used for the export business.
At about 3:00am on 7 March 2010, the plaintiff picked up two men from Parramatta Road in Stanmore and drove to Penrith. When he arrived at the destination, the passengers requested that he walk to the house with them so that they could retrieve money to pay for the taxi fare. As the plaintiff was walking towards the house he was struck in the head by one of the men. The plaintiff sustained injury to his head and neck and was treated in hospital. The assault also caused the plaintiff to suffer psychological injury.
On 16 March 2010 the plaintiff retained PK Simpson to advise him in relation to the assault. The plaintiff chose PK Simpson because it had previously represented him in other personal injury claims.
With advice from his solicitor, the plaintiff made a claim for workers compensation by completing a Workers' Injury Claim Form. On 22 April 2010 the insurer advised that it had accepted provisional liability for the claim and would pay the plaintiff weekly compensation of $960.15 per week, being the Award rate.
On 22 September 2010 the plaintiff attended a conference with the solicitor and Vaughn Jurisich of counsel. Mr Jurisich advised the plaintiff in the solicitor's presence that the plaintiff did not have a work injury damages claim. That advice was recorded in the file notes of the solicitor.
On or about 6 December 2010 the plaintiff proceeded to make a claim in the Commission for permanent impairment in relation to his psychological injury. The plaintiff was examined by an Approved Medical Specialist Assessor and was diagnosed with Major Depressive Disorder with psychotic features. He was assessed as having a 17% whole person impairment (WPI).
On 21 June 2011, the plaintiff's claim for permanent impairment was heard by the Commission. A Certificate of Determination was issued on 22 June 2011 which confirmed a lump sum settlement under ss 66 and 67 of the Workers Compensation Act 1987 consisting of: 1. $25,300 for permanent impairment as a result of the plaintiff being independently assessed as having a 17% whole person impairment (WPI) relating to his psychological injury; and 2. $15,000 for pain and suffering.
On 30 June 2011 and 12 September 2011 respectively, the solicitor sent a Letter of Claim and a Pre-Filing Statement to the insurer and Sunrise Cabs to comply with the procedural requirements required to bring a work injury damages claim. The respondents requested proof of economic loss. The plaintiff's tax returns for the years 2009 and 2010 did not show that he earned any income as a taxi driver. Subsequently, the respondents refused to participate in a mediation on the basis that they disputed liability and wage loss.
On or about 8 November 2011 the insurer ceased paying weekly compensation to the plaintiff.
On 12 December 2011 the plaintiff filed an Application to Resolve a Dispute in the Commission to have the payment of weekly compensation restored (the first Application) from 20 December 2011 onwards at the rate of $961.50 per week. [2] The application also sought payment of unpaid and ongoing s 60 treatment expenses.
At about this time the plaintiff applied for Centrelink benefits and began receiving a Disability Support Pension. As a condition of receiving the pension, he was required to undergo Job Capacity Assessments (JCA) at the request of Centrelink. The JCAs stated that the plaintiff continued to be unfit for work as a taxi driver as a result of his psychological condition.
In or about January 2012 the plaintiff was evicted from his rental accommodation for non-payment of rent. The plaintiff's evidence was that his eviction caused him to lose his primary financial records relating to the operation of the export business and his work as a taxi driver.
The plaintiff was advised by his solicitor that his inability to produce his primary financial records put him at risk of being unsuccessful if the first Application proceeded to hearing before the Commission. The plaintiff was advised to discontinue the first Application and to gather further evidence to prove his wage loss from his inability to work as a taxi driver.
On 13 February 2012 the first Application was discontinued.
On 14 March 2012 a second Application in the same terms was filed by the solicitor in the Commission. The solicitor had contacted the plaintiff's accountant and obtained spreadsheets outlining the plaintiff's income and expenses for some of the relevant period. It was unclear from the evidence who prepared the spreadsheets. I infer from the plaintiff's unfamiliarity with how any of the figures in them were arrived at, that the spreadsheets were prepared by the accountant. The income and expenditure recorded did not always delineate between the export business or the work as a taxi driver. The material obtained did not include any primary records such as receipts or bank statements. The plaintiff's taxation records did not show any income as a taxi driver, because on that material the plaintiff incurred a net loss.
On 20 June 2012 the barrister appeared on behalf of the plaintiff at a conciliation and arbitration hearing instructed by another solicitor from PK Simpson. The plaintiff was again advised by the solicitor and the barrister that the financial evidence required to prove wage loss was insufficient and that he should discontinue the second Application and undertake further enquiries to gather more evidence in support of his claim. On that day the second Application was discontinued.
On 10 July 2012 a third Application was filed in the Commission by the solicitor in the same terms. The evidence filed with the third Application included a statement from the plaintiff and correspondence from his accountant explaining the inability to produce primary financial records. The accountant stated that he had prepared the plaintiff's Business Activity Statements and Income Tax Returns on the basis of primary records provided to him by the plaintiff, but that he had returned that material to the plaintiff after completing his work. The plaintiff stated that his primary financial records were stored at his rental accommodation and that when he was evicted, he had lost his primary financial records.
In or around November 2012 the solicitor was contacted by the representative for Sunrise Cabs advising that if the plaintiff did not intend to commence proceedings in the District Court for work injury damages, the respondents would apply to have the Pre-Filing Statement struck out. On 3 December 2012 the solicitor withdrew the Pre-Filing Statement.

[6]

The plaintiff's evidence of the advice leading to the settlement

I will set out the evidence of the plaintiff on this issue and set out my findings of fact on this issue later. [3]
The plaintiff's evidence was that the solicitor and barrister advised him to accept the insurer's offer because he could not produce primary financial records to prove "a lack of capacity to work". The plaintiff deposed that he was told that he could bring a work injury damages claim and that he would receive a "far greater amount" of damages compared to what he could receive at the Commission or as a result of the settlement. Mr Eggins prepared an Authority to Settle that contained the following clause: I instruct my solicitors to sue my employer for damages (monetary compensation) in the District Court at common law in relation to my injuries in this matter.
The plaintiff deposed that he was also shown a handwritten Heads of Agreement. The plaintiff deposed that Mr Eggins told him that the amount of the settlement was for much less than what he was claiming, but that he would be able to bring a further claim to recover the amount he was entitled to and that "[i]n about 6 to 9 months that's when you will get the big money".
The plaintiff deposed that the barrister was present during this conversation and said to him words to the effect, "Everything will be OK, you will get the damages".
The plaintiff deposed that after receiving this advice from the solicitor and the barrister, he signed the Heads of Agreement and Authority to Settle.
In cross-examination, the plaintiff maintained that he could understand basic English, but could not read or write English. During the course of his dealings with the solicitor he took a friend with him to translate from time-to-time. To my observation the plaintiff found it very difficult in cross-examination to answer questions when he was taken to documents written in English. His evidence was that documents were completed on his behalf, mainly by the solicitor, after he provided the necessary information. The repeated reference to documents written in English seemed, understandably, to increase the plaintiff's frustration. By and large the plaintiff maintained his version of events quite convincingly. In particular, he maintained that on 29 January 2013 he was told that he would receive "big money" for the work injury damages claim which he was told would come to fruition in six to nine months.
The plaintiff was taken to a statement prepared by the insurer from a person, Krishna Narula, the proprietor of Sunrise Cabs. This was a statement relied on by the insurer in the proceedings in the Commission. Mr Narula was not called to give evidence. The effect of the statement was that the plaintiff had only hired a taxi from Sunrise Cabs on the one occasion, being the date on which he was assaulted in 2010 and that he had no prior relationship with Sunrise Cabs. The plaintiff did not accept the content of Mr Narula's statement as true. The plaintiff was challenged as to why Sunrise Cabs did not produce any documentation to support the plaintiff's assertions of hiring a taxi from it on a number of occasions. I note that Sunrise Cabs was deregistered on 2 January 2011 and that the correspondence and subpoenas addressed to Sunrise Cabs was sent at a time when it was in the process of being de-registered and it was unlikely to be answered.
The plaintiff was also asked about his recollection of various aspects of the history of the matter before the Commission. I note that one of the plaintiff's complaints, accepted in the medical evidence, was that he suffered from a very poor memory as a result of his depressive condition. It is fair to say that the plaintiff could not assist much with this line of cross-examination. The plaintiff maintained that any document he was asked for by the solicitor, he obtained and supplied to him. This included obtaining a number of documents from his accountant at various times. The plaintiff did not have any understanding of the entries contained in the spreadsheets.
It was suggested in cross-examination on behalf of the solicitor that the barrister told the plaintiff that "you cannot win your case". The plaintiff accepted that was said.
In cross-examination on behalf of the barrister, it was put to the plaintiff that the barrister advised him that he may be liable for a costs order if the third Application was discontinued. The plaintiff accepted that proposition. Later, the plaintiff gave evidence that he would not have accepted the settlement sum at the Commission had he understood that the settlement sum was all the money he was going to receive in respect of the injuries he sustained in the assault.
It should be noted that the plaintiff gave evidence with the assistance of an acquaintance who acted as an interpreter for him. I was told that this was necessary because an accredited Ashanti interpreter could not be engaged for the proceedings. I was very concerned about this feature of the case. The plaintiff gave a significant amount of his evidence in English. He was often at cross-purposes with the cross-examiner. I formed the opinion that his comprehension of most of the things he was asked was poor. His comprehension of more complex topics was very poor, if he had any understanding at all. Overall his evidence was largely non-responsive to questions but mostly because he did not understand what he was being asked. The intervention of the interpreter did not provide much assistance.
The plaintiff's credit was in issue but in the end, it was not specifically put to him that he was lying on a number of potentially relevant topics. For example, it was not suggested that the assault did not occur or that he had a capacity to work as a taxi driver at any time after the assault. The plaintiff agreed that he has made a number of compensation claims for personal injury as a result of a number of accidents. In and of itself, that fact was insufficient in my view to impugn his credit. On the other hand, I have significant reservations about the accuracy and/or the integrity of his accounts. The spreadsheets prepared in relation to the export business, for example, recorded a lot of expenses but no income. On the business model for the export business I assume that the income for the business was received in Ghana, but that of itself does not explain why there was no income recorded in Australia. In relation to an occupier's liability claim against Woolworths, the plaintiff estimated that his loss from being unable to work in the export business as a result of his injuries was $5,000 per week. It is possible that there was a mistake in the figure of $5,000 put forward in that claim. The plaintiff's evidence, however, was that he was doing well and supporting his family and that he was servicing a mortgage at the relevant time. That is not supported by the financial documents available that simply record no income from the operation of the export business. Accordingly, I have exercised considerable caution in assessing the plaintiff's evidence. The essential findings based on the plaintiff's evidence that I have made necessary to resolve the limited factual issues in this case are supported by the objective evidence.

[7]

The solicitor's evidence

The solicitor deposed that during the conciliation phase of the proceedings that the arbitrator said that she was "not impressed" with the plaintiff's inability to produce primary financial records and said words to the effect, "how are you going to prove wage loss?"
The solicitor deposed, that in his presence, the barrister told the plaintiff words to the effect of "you only get a small settlement today" and "we've been here three times". The solicitor deposed that the plaintiff said that he wanted to settle.
The solicitor deposed that he could not recall if he gave any advice about a work injury damages claim on the day. The solicitor deposed that it was "always" his opinion that the plaintiff did not have a work injury damages claim because there was no negligence on the part of Sunrise Cabs.
The solicitor allowed the barrister to give all the advice to the plaintiff about settlement. His usual practice was to accept counsel's advice unless it appeared to be outside of the range of outcomes that he might anticipate based on his experience.
The solicitor deposed that the barrister advised the plaintiff that he could not win his case and said words to the effect "take it or leave it" with respect to the offer. The solicitor deposed that the plaintiff told the barrister that he wanted to take the offer.
The solicitor deposed that he filled out the Authority to Settle and had the plaintiff sign it. The solicitor did not recall giving any advice to the plaintiff about the prospects of success of a work injury damages claim, which he believed were non-existent.
The solicitor denied that he advised the plaintiff to settle on 29 January 2013 on the basis that he had a work injury damages claim against Sunrise Cabs.
In cross-examination, the solicitor did not agree that the barrister advised the plaintiff that a costs order could be made against him in the Commission and, in the solicitor's experience in the Commission, that was unlikely.
The solicitor agreed that Mr Jurisich's advice confirmed his own opinion that the plaintiff did not have a work injury damages claim because there was no negligence on the part of Sunrise Cabs. Mr Jurisich drafted the Pre-Filing Statement on the solicitor's instructions for the purpose of progressing the work injury damages claim to mediation to see if it could be favourably settled.
The solicitor had used interpreters on a number of previous occasions in dealing with the plaintiff. The solicitor's evidence was that the Commission arranged interpreters for conciliation and arbitration hearings and that an interpreter was not present on 29 January 2013.
The solicitor agreed that commencing a work injury damages claim on behalf of the plaintiff in relation to the assault was futile. The solicitor agreed that in getting the plaintiff to sign the Authority to Settle that he was advising the plaintiff to instruct him to commence proceedings in this Court for work injury damages that in the solicitor's opinion were not viable.
The solicitor's evidence was that there was a policy at PK Simpson to put on a work injury damages claim for any client assessed as having a whole person impairment of 15% or more, regardless of the fact that such a claim was spurious. In the firm's experience, 80-90% of work injury damages claims could be favourably settled at mediation.
The solicitor gave evidence that he did not have a conference with the plaintiff's accountant or ask him to put on an affidavit. The solicitor was satisfied that the correspondence and taxation documents provided by the accountant were all that could be obtained.
The solicitor accepted that he did not attempt to obtain the evidence of wages from comparable workers and that Mr Jurisich suggested this approach in his Advice on Evidence dated 24 May 2011.
The solicitor accepted that he did not attempt to get the relevant Taxi Industry Award to put forward as evidence in the plaintiff's case.
The solicitor accepted that on the basis of the spreadsheets prepared by the accountant and the letters from the accountant to PK Simpson that there was some evidence that the plaintiff was earning approximately $1,000 per week from his work as a taxi driver for about five months prior to the assault.

[8]

The barrister's evidence

The barrister deposed that the briefs he received to advise and appear for the plaintiff were generated by a pro forma draft and that he was not in fact retained to advise the plaintiff on his common law rights. The barrister's evidence was that PK Simpson had a standing arrangement with Mr Jurisich to provide that advice to its clients.
The barrister was instructed at the hearing of the second Application that was discontinued by consent. At that time, the barrister advised the solicitor to undertake further enquiries to obtain evidence to support the plaintiff's claimed loss of wages as a result of his inability to work as a taxi driver.
The barrister was briefed to advise and appear on the third Application on 20 September 2012. He was provided with further evidence being two statements of the plaintiff and further correspondence from the plaintiff's accountant together with Notices of Assessment from the Australian Taxation Office (ATO). The barrister was not involved in preparing or collating the evidence to be relied on by the plaintiff before the Commission.
The barrister deposed that he formed the view that the plaintiff had limited prospects of success on the third Application because: 1. the evidence provided indicated that the plaintiff had no taxable income in the 2010 financial year; 2. the plaintiff had no primary records such as a payslip from Sunrise Cabs; 3. this was the third time that the plaintiff had tried to bring these proceedings.
The barrister deposed that he told the solicitor that the plaintiff had limited prospects of success because he had insufficient evidence and it was his third attempt to make out his case.
The barrister deposed that in conference at the Commission, he advised the plaintiff in the presence of the solicitor, that: 1. he had limited prospects of success because he did not have sufficient evidence to support his loss of wages; 2. he was unsure if the insurer would allow the plaintiff to discontinue the proceedings again without an order for costs against the plaintiff; and 3. given these difficulties that the plaintiff should consider "if he could take any settlement offer that is made".
The barrister deposed that he could not recall if he was present when the plaintiff signed the Authority to Settle and he could not recall anything that was said by the solicitor to the plaintiff regarding the Authority to Settle.
In cross-examination, the barrister gave evidence that he was not asked by PK Simpson to advise the plaintiff as to his work injury damages claim, notwithstanding the statement to the contrary in the observations to his brief.
The barrister believed that he was present when the Authority to Settle was read to the plaintiff and signed by him. The barrister accepted that the plaintiff was "authorising" PK Simpson to proceed with a work injury damages claim but he did not know if they would go that far. The barrister's own view was that a work injury damages claim had very little prospects of success, but he was not asked for his opinion.
The barrister told the plaintiff that the proceedings had been before the Commission three times and that there was still insufficient evidence of what the plaintiff's wages were, including by reference to comparable workers. The barrister told the plaintiff that he could not prove his claim in the Commission and that left him with the option of discontinuing the third Application or settling the matter. The barrister told the plaintiff that if he discontinued the third Application a costs order would be made against him.
The barrister accepted that he used the words "take it or leave it" in reference to the insurer's offer.
The barrister gave evidence that he advised the plaintiff of the maximum amount of his claim for past weekly benefits. This involved the barrister undertaking some calculations. The barrister gave evidence that he could not recall that figure or how it was calculated. No note of the calculations undertaken or note of this advice being given was produced in evidence by the solicitor or the barrister.
The barrister's evidence was that the date for the end of the closed period referred to in the settlement came from the insurer and he could not recall the significance of it. The acknowledgement by the plaintiff that he suffered no ongoing impairment was usual practice in the Commission and the barrister understood it was required to prevent claimants coming back to the Commission and asking for more. The statement was intended to be an admission by the plaintiff against his interests that the insurer could rely on in the future. The barrister advised the plaintiff that without that admission the insurer would not settle the claim.
The barrister's evidence was that he was aware of a change in the legislation from about June 2012. The barrister advised the plaintiff of his rights arising under the new regime, in particular that the Commission had no power to make an award from 1 January 2013 onwards.

[9]

Events after the settlement

On 31 January 2013 the Commission issued a Certificate of Determination to give effect to the Consent Orders filed by the parties to the third Application. The Certificate of Determination relevantly provided: Consent Orders 1. The respondent is to pay the applicant weekly benefits compensation pursuant to section 40 of the Workers Compensation Act 1987 at the rate of $630 per week from 20 December 2011 to 19 April 2012 and agreed to total $10,889.99. Thereafter there is an award for the respondent for any and all claims for weekly compensation. 2. Award for the respondent for any claim for section 60 expenses pertaining to psychiatric injury after 19 April 2012. 3. The respondent is to pay the applicant's costs as agreed or assessed. Notation 1. Upon payment of the monies referred to above the applicant admits and agrees that he has received all entitlements to workers compensation to date and suffers no economic loss or incapacity as a result of injury as alleged in workers compensation matter 7043/12, being psychiatric injury.
On 19 February 2013 the plaintiff received a letter from Centrelink advising him that he was required to repay $6,425.50 in social security benefits for the closed period that was the subject of the settlement.
On 21 May 2013 the plaintiff attended a conference with Mr Eggins. The plaintiff was very upset because after the Centrelink payback he was left with very little of the settlement sum. Mr Eggins advised the plaintiff that he would serve a Pre-Filing Statement in preparation for the work injury damages claim. Mr Eggins advised the plaintiff that the work injury damages claim would have to proceed to court and was unsuitable for mediation. Mr Eggins told the plaintiff that there was a problem with the work injury damages claim because there was no negligence on the part of Sunrise Cabs. Mr Eggins resolved to organise a further conference with Mr Jurisich to discuss the future conduct of the matter.
On 12 July 2013 the plaintiff commenced a work injury damages claim in this Court.
In or about 4 September 2013 PK Simpson advised the plaintiff that the work injury damages claim had no prospects of success because there was no evidence of negligence on behalf of his employer and that the work injury damages claim should be discontinued. The solicitors sought the plaintiff's urgent instructions to discontinue the work injury damages claim on the basis that each party would pay its own costs and that PK Simpson would not seek any payment from the plaintiff.
On 6 September 2013 the plaintiff telephoned PK Simpson and spoke to Mr O'Riain. The plaintiff was advised that the matter was listed for a pre-trial conference on 11 September 2013 and that the Court needed to know if the matter was proceeding on that day. The plaintiff was advised that his choice was to discontinue the work injury damages claim or to instruct other solicitors. In the event that he did not choose to discontinue the work injury damages claim, he was informed that PK Simpson would be filing a notice of ceasing to act as his solicitor.
On 11 September 2013 the pre-trial conference was adjourned until 14 October 2013. Later that day the plaintiff had a further telephone conference with Mr O'Riain. The plaintiff gave instructions to discontinue the work injury damages claim. Mr O'Riain undertook to continue investigating if Sunrise Cabs was negligent and if the plaintiff had an arguable case.
On 14 October 2013 the work injury damages claim was discontinued on the basis that each party was to pay their own costs.
In or about mid-March 2014 the plaintiff telephoned PK Simpson to ascertain what was happening with his claim. A telephone conference was arranged with a solicitor, David Kim. Mr Kim asked Janice Garcia of PK Simpson to re-arrange the telephone conference. On 20 March 2014 Ms Garcia spoke to the plaintiff on the telephone. The plaintiff asked Ms Garcia for an update on his claim in writing because contact by telephone was difficult for him.
On 19 August 2014 Mr Eggins telephoned the plaintiff. Mr Eggins informed the plaintiff that the work injury damages claim had been discontinued and was finalised. The plaintiff told Mr Eggins that he let him down by leaving the firm at the relevant time.
On 19 August 2014 Mr Eggins sent a letter to the plaintiff advising that the work injury damages claim had been discontinued in accordance with the plaintiff's instructions and that the file was closed.
On 7 October 2014 the plaintiff was seriously injured in a motor vehicle accident.
On 26 November 2020 the Commission issued a Certificate of Determination relating to a further Application commenced by the plaintiff against the insurer and heard by Arbitrator Bamber on 28 August 2020. In that Application the plaintiff sought payment of weekly compensation for the closed period of 1 February 2013 to 14 June 2013 (19 weeks) and unpaid s 60 expenses. The arbitrator awarded the plaintiff s 60 expenses in the sum of $3,696.74 and weekly compensation in the sum of $768.14 for the period of 1 February 2013 to 14 June 2013. The arbitrator found that: 1. The plaintiff was not estopped from bringing the 2020 application for his physical injuries sustained in the assault because the 31 January 2013 Certificate of Determination applied only to his psychological injuries; 2. The amount of $960.18 per week provided for by the Taxi Industry (Contract Drivers) Contract Determination 1984 (the Contract Determination) was a fair and reasonable estimate of the plaintiff's pre-injury average weekly earnings; 3. Because the plaintiff was not an existing recipient weekly benefits on 1 October 2012, he was entitled to weekly compensation for a period of 130 weeks, of which he had already received payments for 111 weeks, leaving an entitlement of 19 weeks; 4. The plaintiff was not an existing recipient of weekly benefits on 1 October 2012 as a result of the settlement agreement entered on 29 January 2013, which provided for payments up to 19 April 2012.

[11]

The scope of duty owed by the solicitor

The solicitor owed a duty to the plaintiff in contract and in tort. The scope of the duty with respect to the latter is usually set by the terms of the retainer: Badenach v Calvert (2016) 257 CLR 440 at [16] (French CJ, Kiefel and Keane JJ).
Subject to statutory or contractual exclusion or modification, the duty of care that a solicitor owes to a client is a comprehensive duty arising in contract by force of the retainer and in tort by virtue of entering into the performance of the retainer. The duty is to exercise that degree of skill and care to be expected of a member of the profession having expertise appropriate to the undertaking of a function specified in the retainer. Performance of that duty might require the solicitor not only to undertake the precise function specified in the retainer but to provide the client with advice on appurtenant legal risks: Badenach at [57] (Gageler J).
An agreement providing for the limitation of a solicitor's duty must be clear and unambiguous and the client must be fully informed as to the limited reliance he or she may put on his or her solicitor: Huntington Estates Ltd v Wilde & Partners [1997] 1 Lloyds' Law Rep 525 at 526 (Lightman J).
The express terms of the Retainer Agreement dated 16 March 2020 were merely that PK Simpson was instructed to act in respect of the plaintiff's workers compensation claim on the basis that the plaintiff would not be charged legal costs and that PK Simpson would recover legal costs from the insurer. The balance of the terms of retainer fell to be implied by conduct. In that regard, the solicitor prepared the Applications and collated the evidence to be relied on before the Commission. The solicitor briefed counsel and attended at the Commission. The solicitor provided advice on the procedure to be followed and the compensation that was payable under the Act. The solicitor briefed the barrister to provide advice and was present on 29 January 2013 and on previous occasions when the barrister provided advice on the evidence to be collated and the quantum of compensation that could be claimed by the plaintiff.
I was not taken to any evidence of a written retainer agreement relating to the plaintiff's common law claim. It is clear, however, that PK Simpson was retained by the plaintiff to advise and act for him on a work injury damages claim, and that PK Simpson had a duty to act with reasonable care in doing so. The solicitor briefed Mr Jurisich and arranged for the plaintiff to have a conference with him so that he could be advised on his common law rights. The solicitor was present when Mr Jurisich advised that the plaintiff's prospects of bringing a successful work injury damages claim were poor and the plaintiff provided "very clear instructions" to proceed only with a claim for compensation under the Act. The solicitor continued to provide instructions to Mr Jurisich to prepare the necessary documentation to be in a position to commence the work injury damages claim. PK Simpson ultimately did commence a work injury damages claim on behalf of the plaintiff.
What is required for the exercise of reasonable care by a lawyer in the circumstances of a case or transaction is fact-dependent: Jadwan Pty Ltd v Rae Partners (a firm) [2020] FCAFC 62 at [439], cited with approval in Australian Executor Trustee (SA) Ltd v Kerr [2021] NSWCA 5 at [263] (Gleeson JA, Leeming JA and Emmett AJA agreeing).
An inexperienced client will need and will be entitled to expect a lawyer to take a much broader view of the scope of their retainer and of their duties than will be the case with an experienced client: Carradine Properties Ltd v DJ Freeman & Co [1999] Lloyds Law Rep 483 (Donaldson LJ).
More may be expected of a lawyer acting for a client who suffers some disadvantage, for example, by reason of age, lack of education or business inexperience: Margaroff v Stanizzo [2009] NSWDC 294 at [77] and Procter v Raleys Solicitors [2015] EWCA Civ 400 at [45]-[49] (Tomlinson LJ, Kitchin and Gloster LJJ agreeing). In such cases, a prudent lawyer should take special care to ensure that advice is communicated in such a way that the client understands its nature and effect: Stipanov v Mier [2006] VSC 258 at [85].
A lawyer engaged to provide legal advice is under a duty to inform and advise the client, in a way that is understood by the client. It is not part of a lawyer's duty to force that advice on the client or to make the decision for the client: Keddie v Stacks Goudkamp Pty Ltd [2012] NSWCA 254 at [152] (Beazley JA, Barrett JA and Sackville AJA agreeing). Burt v Ware unreported CA NSW 28 October 1998 at [10]-[11] (Mason P, Beazley JA and Fitzgerald JJA agreeing) and Dew v Richardson [1999] QSC 192 at [42] (Chesterman J).
A duty may be imposed on a lawyer to give an appropriate warning about matters of which the client should be informed: Curnuck v Nitschke [2001] NSWCA 176. A particular manifestation of the duty to warn arises where a lawyer becomes aware of information in the course of the retainer, which if not acted on or communicated to the client may cause the client to suffer loss, even though the event giving rise to the loss is not central to the retainer itself: Roberts v Cashman [2000] NSWSC 770.
As at 29 January 2013 the solicitor was also obliged by s 345 Legal Profession Act 2004 not to provide legal services in respect of legal proceedings unless he had a reasonable belief based on provable facts and a reasonably arguable view of the law that the claim had reasonable prospects of success.
On 29 January 2013 the solicitor owed the plaintiff a duty to advise him of the matters that he needed to know to be put in a position to make an informed decision as to whether to compromise his claim, continue to arbitration hearing or to discontinue the third Application to obtain more evidence in support of it. This involved giving advice as to the extent of compensation recoverable in his claim to that point in time and in the future, his prospects of success in the Application and his choices of action, explained in a way that could be understood by the plaintiff.

[13]

Were the defendants in breach of their duty of care owed to the plaintiff?

Section 5B Civil Liability Act 2002 provides: 5B General principles (1) A person is not negligent in failing to take precautions against a risk of harm unless: (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things): (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm.
Section 5C Civil Liability Act 2002 provides: 5C Other principles In proceedings relating to liability for negligence: (a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and (b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and (c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.
The question of whether the defendant was guilty of breach of duty turns first on determining whether the risk in question is one which the defendant knew or ought to have known: s 5B(1)(a). This means the risk must be defined.
The risk of harm was the risk of the plaintiff agreeing to compromise his claim for compensation under the Act on the basis of inadequate or inaccurate advice and thereby suffering economic loss. The risk was not insignificant because the plaintiff was an inexperienced client with a limited understanding of English and he was reliant on his legal representatives to provide him with the necessary advice to be able to make an informed decision.
The inquiry about whether the defendants ought to have taken the precautions for which the plaintiff contends, turns on (amongst other relevant matters), the foreseeability of the risk, whether that risk was not insignificant and whether in the circumstances, a reasonable person in the person's position would have taken those precautions. The inquiry is not to be undertaken in hindsight: Vairy v Wyong Shire Council (2005) 223 CLR 422 at [126] per Hayne J, but must be answered prospectively, before the incident occurred: Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 at [31].
The inquiry is not confined to what could have been done to eliminate, reduce or warn against the risk. While asking what could have been done will reveal what was practicable, it is also necessary to ask would it have been reasonable for the defendant to take those measures: Neindorf v Junkovic (2005) 80 ALJR 341 at [93] (Hayne J).
The solicitor and barrister were required to bring to the task the competence and skill that is usual among persons exercising their profession and to exercise due care: Voli v Inglewood Shire Council (1963) 110 CLR 74 at 84.
If reasonable care and skill is exercised a lawyer is not liable for a mere error of judgment or a mistake made on a difficult point of law: Bannerman & Co v Murray [1972] NZLR 411 at 422 (North P) and 429 (Woodhouse J).
A solicitor who seeks the advice of counsel is ordinarily justified in relying on that advice and is not negligent by doing so, provided that the solicitor has not suspended independent judgment leading to the acceptance of blatantly incorrect advice from counsel: Boland v Yates Property Corp Pty Ltd (1999) 167 ALR 575 at [142] (Kirby J).
Irrespective of incorrect advice being given by counsel, a solicitor remains liable for the consequences of his or her own ignorance or non-observance of the rules of practice and/or for the mismanagement of the conduct of the action for which the solicitor is specifically responsible, such as a failure to properly instruct counsel or a want of care in preparation for trial: Allison v Rayner (1827) 7 B & C 441 at 443 and Locke v Camberwell Health Authority (1990) 140 NLJ Rep 205.
Where lawyers are retained to prepare and conduct proceedings the retainer includes, by implication, an obligation to advise on settlement of the proceedings: Seamez (Australia) Pty Ltd v McLaughlin [1999] NSWSC 9 at [25] (Sperling J). In giving that advice, lawyers must exercise reasonable care and skill: Luke v Wansbroughs (a firm) [2003] EWHC 3151 (QB) at [87] (Davis J).
Caution should be exercised in finding a lawyer liable for negligent advice relating to settlement, because there is a public interest in the encouragement of the settlement of disputes. Liability should be reserved for clear cases and those involving egregious errors, or else there is a risk that lawyers will refrain from providing advice on settlement: Seamez at [29].
A lawyer's advice will not be negligent merely because a court later considers that a more favourable outcome would have been achieved if the dispute had been litigated to judgment: Studer v Boettcher [2000] NSWCA 263 at [63] (Fitzgerald AJA). The assessment of the relevant factors to be taken into account in making a decision to settle can lead different people to different decisions and this reflects the duty of the lawyer to inform and advise as opposed to forcing advice onto a client or making the decision for the client: see [97] above.
Lawyers are obliged to give a client advice couched in terms appropriate to the client's understanding, sufficient to afford the client the opportunity to make an informed decision whether or not to settle. This may encompass an obligation to warn the client of the risks, to correct wrong notions or unrealistic expectations and to encourage the client in the direction that the lawyer believes is in the best interest of the client: Masters v Dobson Mitchell & Allport [2014] TASSC 31 at [81] (Pearce J). A court's inquiry is to determine whether the advice proffered was within the range of advice that could in the circumstances be reasonably and properly given: Luke at [114]. The range is not to be too strictly construed or determined with the benefit of hindsight.
A court's wariness of imposing liability will not protect a lawyer from advice that is patently wrong in law or that involves a misstatement of fact: Seamez at [236]. The failure to give competent advice as to the strength of a client's case may also lead to a breach of duty: Kolavo v Pitsikas [2003] NSWCA 59 at [57].
Taking into account all of the evidence I make the following findings of fact relating to the advice received by the plaintiff on 29 January 2013: 1. The plaintiff was an inexperienced client with an unhealthy appetite for litigation and an unfortunate history of personal injury. The plaintiff was poorly educated and had a limited understanding of the English language. The plaintiff had no knowledge of how to protect his legal rights and was dependent on his lawyers for competent advice. 2. I do not accept the barrister's evidence that the plaintiff was advised about the quantum of the compensation he could claim in the Commission. There was no objective evidence to support this evidence in the form of calculations or file notes made by the solicitor, and the barrister's evidence with regard to his recollection of the quantum was very vague. In the circumstances, I am not satisfied that the plaintiff was advised what he was giving up by accepting the settlement offer. 3. The barrister was provided with the evidence to be relied on in the third Application when he received the brief in September 2012. It should have been apparent to the barrister at that time that the plaintiff had insufficient evidence to prove his claim and that the solicitor had not taken certain vital steps, such as obtaining wage records from comparable workers. 4. I accept the barrister's evidence that he told the plaintiff that he could not prove his claim and that his choice was to discontinue the third Application and suffer an order for costs or to settle the claim. 5. The offer of settlement was the only offer made by the insurer and the terms of it were dictated by the insurer. The intent of the offer, if accepted by the plaintiff, was to stop him coming back to the Commission again. 6. The barrister used the words "take it or leave it" with regard to the offer. 7. The barrister failed to advise the plaintiff that he could proceed to have his claim heard by the arbitrator and that his evidence as to the loss of his primary financial records and the structure of his business affairs, if accepted, could result in an award of compensation in his favour. 8. The barrister wrongly advised the plaintiff that he would have to pay costs if the third Application was discontinued. There was no evidence that a costs order would be sought by the insurer. I accept the solicitor's evidence that a costs order against the plaintiff was highly unlikely. 9. In all of the circumstances, the barrister's advice amounted to an ultimatum to the plaintiff that had the effect of taking away the plaintiff's choice to accept or reject the settlement offer. 10. The solicitor should have advised the plaintiff that the barrister's advice was wrong and that the plaintiff had the option of having his case heard by the arbitrator or discontinuing the third Application without a costs penalty. The solicitor failed to exercise independent judgment as to the content of the advice being provided by the barrister to the plaintiff. 11. In obtaining the plaintiff's Authority to Settle, the solicitor raised with the plaintiff the possibility of pursuing a work injury damages claim. The solicitor obtained written instructions from the plaintiff to commence a work injury damages claim. 12. I do not accept that the solicitor used the words "big money" in speaking to the plaintiff about the work injury damages claim. But that finding is not essential to my acceptance of the plaintiff's case on this point. Implicit in the solicitor's discussion with the plaintiff was that he had an alternative claim in the form of the work injury damages claim. The plaintiff was entitled to expect that the work injury damages claim was worth pursuing, in that he would receive a positive outcome from it by an award of damages in his favour. 13. The solicitor knew or ought to have known that by raising the possibility of pursuing a work injury damages claim, the solicitor was contradicting the advice of Mr Jurisich that the plaintiff did not have a work injury damages claim. The solicitor was obliged to remind the plaintiff of the advice of Mr Jurisich or to inform the plaintiff of his own view that a work injury damages claim was not viable. 14. I am satisfied that the solicitor told the plaintiff that he could bring a work injury damages claim to appease him because he was unhappy with the amount of the settlement offer. This finding is also supported by what occurred later. When the plaintiff complained about the Centrelink payback, the solicitor responded by telling the plaintiff he would serve the Pre-Filing Statement as a precursor to the commencement of the work injury damages claim. 15. In all the circumstances, the solicitor introduced and allowed the plaintiff to take into account an irrelevant consideration in determining whether or not he should accept the insurer's offer to compromise his claim for compensation under the Act. 16. The plaintiff did not understand by reference to the advice that he was given on 29 January 2013 that his only rights to recover compensation relating to the assault were provided for by the Act, and that by accepting the settlement offer he was making an evidentiary admission that made it more difficult for him to pursue further applications before the Commission in relation to the assault. Rather, the plaintiff believed and acted in accordance with the belief that his rights to further compensation for the injuries sustained in the assault would be pursued through a work injury damages claim. 17. In the circumstances of this case, I am not satisfied that the barrister was obliged to inform the plaintiff of his opinion about the prospects of the work injury damages claim. 18. The plaintiff required the assistance of an interpreter. The defendants knew or ought to have known that the plaintiff was poorly educated, had a limited understanding of English and could not understand legal advice given to him in English. 19. It was clear from the plaintiff's evidence that he had little understanding of what occurred at the Commission at the time and even now. The plaintiff's actions after 29 January 2013 are consistent with his misunderstanding that was conveyed through the advice he was given by the defendants.
I am satisfied on the balance of probabilities that the barrister was in breach of his duty owed to the plaintiff by giving wrong and incomplete advice, for giving the advice in a way that suggested that the plaintiff did not have a choice, and by failing to ensure that the legal advice given was interpreted to him in his first language.
I am satisfied on the balance of probabilities that the solicitor was in breach of his duty owed to the plaintiff by failing to correct the barrister's advice, by encouraging the plaintiff to bring a work injury damages claim that he knew was hopeless and which was an irrelevant consideration to the plaintiff's decision to settle the proceedings before the Commission, and for failing to ensure that the legal advice given was interpreted to him in his first language.

[14]

Issue 2 Causation

Section 5D Civil Liability Act 2002 provides: 5D General principles (1) A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability). (2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. (3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent: (a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and (b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest. (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
Section 5E Civil Liability Act 2002 provides that the onus is on the plaintiff to demonstrate, on the balance of probabilities, any fact relevant to causation.
I am satisfied that the negligent advice of the barrister caused the plaintiff to accept the settlement offer, by conveying to the plaintiff that he did not have a choice to do otherwise.
I am satisfied that the negligent failure of the solicitor to correct the barrister's advice led to the same result. Further, the solicitor's negligent advice relating to the work injury damages claim induced the plaintiff to accept the settlement offer on the basis that he had an alternate remedy. I am satisfied that the plaintiff would not have accepted the settlement offer if he understood that he did not have a viable work injury damages claim and that the settlement sum was all of the compensation that he would receive as a result of the assault. I accept the plaintiff's evidence on this point.
The acceptance of the settlement offer caused the plaintiff a loss of opportunity to have the third Application determined by the Commission, in which he would have been entitled to claim weekly compensation benefits from 20 December 2011 to 31 December 2012 at a rate to be determined by the Commission.
I am satisfied that it is appropriate for the scope of the defendants' liability to extend to the harm caused.

[17]

The plaintiff's submissions

The plaintiff responded with two submissions. First, that the defendants should have progressed his claim earlier in time, so that he was in receipt of weekly compensation benefits before 1 October 2012. This would have involved having the first or second Application proceed to determination by the Commission. And second, that the settlement agreement made it more difficult for the plaintiff to pursue whatever other rights he had before the Commission and that the Court should assess damages arising from the defendants' wrongful conduct robustly.
The plaintiff's first submission can be disposed of quickly.
The plaintiff did not plead that the defendants were negligent by failing to advise him to proceed with the first or second Application on the basis that the legislation might change. The defendants did not prepare their evidence to meet that allegation and they were not cross-examined on it. The argument first surfaced in submissions in response to the defendants' valuation of the plaintiff's lost opportunity.
The 2012 amending Act was passed by both houses of Parliament on 22 June 2012 and assented to on 27 June 2012. The second Application was discontinued on 20 June 2012. There was no evidence that the defendants knew or ought to have known of the proposed amendments at any relevant time.
In all circumstances, the plaintiff's first submission cannot be accepted because there is no evidence to support it and it would fundamentally change the plaintiff's case, such that the defendants would be placed in a position of insurmountable prejudice.
As to the plaintiff's second submission, it is fair to say that the acceptance of the plaintiff in the settlement agreement that he did not suffer ongoing psychological incapacity created an evidentiary hurdle for the plaintiff to contend with in relation to any further applications to the Commission. It appears from the Arbitrator's decision of 29 November 2020, that the Commission would consider that there was a res judicata created by the settlement agreement that could, in appropriate circumstances, be set aside. In the 2020 Application the plaintiff went around the evidentiary hurdle by seeking compensation for his physical injuries. The present position is that the plaintiff has not sought to prove that the hurdle cannot be overcome.
The Commission has repeatedly decided that a res judicata estoppel created by a consent award operates only up to the date it is made, does not eliminate future rights, does not create an issue estoppel and must not be applied in such a way to allow contracting out of the Act, which is prohibited by s 234 of the Act: Seaib v Hays Personnel Services (Aust) Pty Ltd [2008] NSWWCCPD 36 at [77] (Snell ADP).
I am satisfied that the plaintiff could establish on the balance of probabilities that the Commission should reconsider the evidence contained in the settlement agreement because his decision to settle was the product of the inadequate and incomplete advice in 2013 and 2014 and he still had an incapacity for work arising from the assault.
As to the second aspect of the plaintiff's second submission, I accept that the defendants should not be allowed to take advantage of their own wrong and that as a general rule the Court should take a robust approach to assessing damages: Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46.

[18]

Relevant principles

By settling his claim, the plaintiff lost the opportunity to have his claim determined by the Commission.
In Firth v Sutton [2010] NSWCA 90 the Court of Appeal adopted the following approach to the assessment of damages for a lost cause of action: 1. arrive at a notional award; 2. apply a discount for the contingency of obtaining a favourable result; 3. deduct the cost of obtaining the notional award; [4] 4. deduct receipts (such as social security); and 5. add interest.
In my view, the only matter that the plaintiff can be compensated for is his loss of opportunity to proceed with his case before the Commission for weekly compensation benefits. That can only be done by reference to what the Commission could have awarded him on 29 January 2013.
At that point, the Commission did not have the power to make an award after 1 January 2013, because the 2012 amending Act introduced the requirement for the insurer to conduct a work capacity assessment as a necessary precursor to the award of compensation for the period after 1 January 2013.
It follows that the Commission could only have made an award for weekly compensation benefits for the period 20 December 2011 to 31 December 2012, being a period of 54 weeks.
In the period after the first 26 weeks of incapacity, the plaintiff was entitled to a weekly payment at the statutory rate, so long as that amount did not exceed the worker's current weekly wage determined in accordance with s 42 of the Act. This necessitated the calculation of the plaintiff's current weekly wage. For the reasons set out above, the evidence relied on by the plaintiff on 29 January 2013 was limited.
In her Determination of 26 November 2020, the Arbitrator accepted on the evidence that the application of the Contract Determination was a reasonable estimation of the plaintiff's pre-injury average weekly earnings. This was a conclusion that was clearly open on the evidence for the Commission to have made in January 2013. If the plaintiff's evidence was accepted then he worked on contract as a taxi driver and the use of the Contract Determination was a reasonable way of estimating the plaintiff's loss, when his actual loss could not be ascertained. It was reasonable to approach the matter on the basis that it was very unlikely that the plaintiff would have continued to do the taxi driving work on a bailment if he was not making a wage equivalent to or greater than the amount he could have obtained working as a contract driver. I will adopt this figure, which is slightly less than the statutory rate of $961.50.
On that basis, the total amount the plaintiff could have been awarded by the Commission was $960.18 per week for the period of 54 weeks, coming to a total of $51,849.72.
From that amount, there should be deductions for the amount received as a result of the settlement, being $10,889.99 and the amount of the disability support pension received by the plaintiff in the period of 20 April 2012 to 31 December 2012, in the sum of $14,190.27. This leaves a remaining balance of $26,769.46. A further deduction for taxation at the rate of 19% should be made, leaving a figure of $21,683.26.
That figure should be further discounted to account for the possibility that the Arbitrator may not have accepted the plaintiff's evidence as to wage loss, or arrived at a lower figure than I have applied, if the matter had proceeded to arbitration on 29 January 2013.
In arriving at the appropriate discount figure, I have taken into account that the medical evidence clearly established that the plaintiff was unfit for work as a taxi driver. The Commission was required to assess the plaintiff's wage loss arising from that incapacity in the application of beneficial legislation. On the other hand, the accounts from the plaintiff's export business were deficient in that they failed to record any income from that business and this called into question the bona fides of the plaintiff's business activities.
The appropriate discount for that chance is 40%, leaving a figure of $13,009.96.
The plaintiff retained any rights to weekly compensation benefits that he may have had from 1 January 2013 onwards. He has obtained an award from the Commission for some of those entitlements and is free to make other applications to the Commission, which will be decided on their merits.
I am satisfied on the balance of probabilities that the plaintiff's loss of a chance to have his claim determined by the Commission had a value of $13,009.96.
To that figure should be added interest in the sum of $6,076.69 calculated in accordance with Appendix 1, for a total award of $19,086.65 inclusive of pre-judgment interest.

Osei v P K Simpson & Co. Pty Limited and Carney - [2021] NSWDC 74 - NSWDC 2020 case summary — Zoe

At a glance

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Judgment (26 paragraphs)

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Cases Cited (21)

Cited By (2)