Paulson v Cardillo

Factual background

1. The background circumstances are that the plaintiff, a former Sherriff's Officer, was unfairly dismissed from that employment after 6 years in that role. He engaged the defendant's firm of solicitors to represent him in unfair dismissal proceedings that he brought in the IRC against his former employer.
2. In those proceedings, the defendant's employed solicitor, Mr Stuart Gray, undertook the preparatory work of that IRC litigation and briefed counsel to appear for the plaintiff in that forum.
3. Those proceedings were contested. In the course of those proceedings the plaintiff's legal representatives made forensic decisions as to what evidence would or would not be called to support the plaintiff's claims. Those proceedings were ultimately determined in the plaintiff's favour. He secured monetary compensation for unfair dismissal. However, he failed to secure his preferred remedy of reinstatement to his former employment.
4. In a carefully reasoned decision that plainly involved the exercise of a judicial discretion, in the IRC, the Commissioner determined that in the prevailing circumstances, the implementation of the plaintiff's claimed remedy of reinstatement was impracticable: Paulson v Industrial Relations Secretary (Department of Justice) [2017] NSWIRComm 1037, at [280].
5. The plaintiff was dissatisfied with that decision. He subsequently unsuccessfully appealed to the Full Bench of the IRC to challenge that decision: Paulson v Industrial Relations Secretary (Department of Justice) [2018] NSWIRComm 1004, at [32].

Claim by plaintiff

1. The plaintiff claims his former solicitor was negligent and had engaged in misleading conduct within the meaning of s 18 and s 29 of the Australian Consumer Law. The plaintiff has not made any allegation of unconscionable conduct on the part of his former solicitor. His claims stand to be determined in accordance with the requirements of the CL Act.
2. In particular, the plaintiff claims that in the IRC proceedings there was an alleged failure on the part of his lawyers to introduce relevant and available evidence to support his case for reinstatement. He therefore claims that, but for those alleged failures, he lost the opportunity to secure the material advantage of an order for the reinstatement of the employment from which he had been unfairly dismissed: Sellars v Adelaide Petroleum NL (1994) 179 CLR 349.
3. The pursuit of a claim for the loss of an opportunity to secure a reinstatement order in the IRC proceedings is problematic in these proceedings because the disputed reinstatement issue that subsisted between the plaintiff and his former employer in those proceedings was quelled by the reasoned decision of the IR Commissioner, and that decision has not been disturbed on appeal.

Defences pleaded

1. For the limited purpose of the present application, in order to facilitate economy of argument, the applicant defendant accepts the factual basis of the plaintiff's claims as pleaded, that is, taking the plaintiff's pleaded case at its highest. There is no suggestion that the claim as presently pleaded may need amendment.
2. The applicant defendant relies upon a series of substantive defences as follows.
3. First, the applicant defendant contends that in the course of the IRC proceedings the plaintiff's legal team made the decision not to call certain evidence in those proceedings because it was considered that to do otherwise would not have assisted the plaintiff's case for reinstatement.
4. Secondly, and consequentially, the applicant defendant argues that the principles concerning the immunity of advocates acting in legal proceedings precludes the plaintiff from succeeding in his present claim. That argument arises because the decision not to call certain evidence in the IRC proceedings was intrinsically bound up with the forensic decisions that legal practitioners are routinely required to make in the course of preparation for litigation.
5. Thirdly, the applicant defendant draws upon the policy principle of needing to ensure finality of litigation to argue that these proceedings represent an impermissible collateral attack upon the reasoned decision of the IRC in the former proceedings, in which all relevant matters in dispute were finally determined.
6. Fourthly, the applicant defendant relies upon defences that invoke the provisions of s 5D(1)(b) of the CL Act concerning the causation of damages, where the matter at issue is the difficult and imponderable question of whether different evidence, if adduced, would have persuaded the IRC to order the plaintiff's reinstatement.

Issues that determine the present application

1. In the course of their respective submissions the parties accepted the formulation of the pivotal issues which would determine the present application.
2. Those issues were first, whether in this case the principle of advocate's immunity operates to preclude the plaintiff from advancing his claims against his former solicitors (D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12; Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16), and secondly, whether the plaintiff has identified sufficient elements of an arguable case against the defendant to mandate a hearing on the merits: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69.

Evidence

1. The evidence relied upon by the applicant defendant comprised an affidavit sworn on 17 June 2021 by his solicitor, Ms Kristy Nunn. That affidavit annexed historical documents that were relied upon in the IRC proceedings and it also annexed the IRC's extensively detailed published reasons for decision and dispositive orders in those proceedings.
2. The evidence relied upon by the respondent plaintiff comprised an affidavit sworn on 3 September 2021 by his solicitor, Mr John Capsanis. That affidavit was essentially in the form of submissions.
3. Neither party sought to cross-examine the deponents of those two affidavits which were read without objection. No additional oral evidence or documents were tendered in the application.

Applicant defendant's submissions

1. The applicant defendant accepts that in seeking to deprive the respondent plaintiff of the opportunity to have his case determined on the merits he must overcome a high barrier. In that regard, he submitted that, in taking the plaintiff's claim at its highest, the case should nevertheless be summarily dismissed because it is so obviously untenable that it could not possibly succeed: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69, at p 129.
2. In taking that approach, the applicant defendant argued that in determining a strike out application, the question of advocate's immunity should be determined on the pleadings as the first step before giving any detailed consideration to the claim of negligence: Donnellan v Woodland [2012] NSWCA 433, at [7], [9], [276].
3. The applicant defendant relied upon the statement adopted in Donnellan v Woodland at [169], to the effect that litigation conduct which fell within the doctrine of advocate's immunity included work that was so intimately connected with the conduct of the case even though it involved a preliminary decision that affected the way the case was to be conducted at a hearing, following Rees v Sinclair [1974] INZLR 180, at 187.
4. The applicant defendant also relied upon the statement by the plurality in D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12, at [87] to the effect that it would be "artificial in the extreme" to draw the line at the courtroom door as to steps taken in the conduct of litigation which attract advocate's immunity.
5. The applicant defendant also pointed to the nature of advocate's immunity from suit as not being limited to causes of action based on negligence. It included a wider immunity that extended to other causes of action, including those with a statutory basis: Young v Hones [2014] NSWCA 337, at [174]; Nikolaidis v Satouris [2014] NSWCA 448, at [24]-[26].

Respondent plaintiff's submissions

1. The respondent plaintiff raised the novel and not previously considered contention that the principles governing the immunity of advocates have no application to proceedings in the IRC because, it was argued, that Tribunal was not a court of justice that exercised judicial jurisdiction. In support of that contention it was submitted that the nature of the proceedings before the IRC were conciliatory and arbitral, rather than adversarial.
2. The respondent plaintiff argued that it was by no means certain that advocate's immunity applied to IRC proceedings. In that regard, it was argued that the IRC was concerned with conciliatory and arbitral functions as provided by the Industrial relations Act 1996 (NSW) ("IR Act").
3. That argument drew upon the provisions of s 163 of that Act which provides that the IRC, a commission and not a court, is not bound to act with formality, nor is it bound by the rules of evidence, and it may instead proceed according to considerations of what is just, equitable, and in good conscience, according to the merits of the disputed factual matters before it, without regard to technicalities or legal forms.
4. Contentiously, the respondent plaintiff submitted that as there had been no judicial determination of his claim for reinstatement in the proceedings before the IRC, there is no present impediment to prevent him from seeking to litigate the issues raised in the present proceedings to claim damages from the firm of solicitors that formerly represented him in the IRC proceedings.
5. In making that submission, the respondent plaintiff relied upon the proposition that the defence of advocate's immunity does not necessarily apply in every case: Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16. Consequently, drawing upon well settled statements of principle, the respondent plaintiff argued that it could not be said with the requisite high degree of certainty that advocate's immunity applies to the conduct of the case before the IRC so as to preclude the plaintiff's case being taken to a hearing on the merits: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69, at p 129.
6. The latter submission requires an examination of the nature of the decisions reached in the IRC by the Commissioner at first instance and by the Full Bench on appeal.

Consideration

1. In considering the respective arguments it is convenient to first identify the nature of the underlying proceedings that were before the IRC before proceeding to consider the question of advocate's immunity.

Nature of the IRC proceedings

1. In my view, the distinction argued by the respondent plaintiff to the effect that the IRC, being a commission, and not a court, should be seen to be a distinction without material significance. That conclusion arises because of the following matters: 1. The IRC had a statutory jurisdiction to hear and to quell by authoritative determination, industrial disputes that existed between litigants in that jurisdiction; 2. The IR Commissioner determined the plaintiff's proceedings in that jurisdiction by exercising the power conferred by s 89 of the IR Act concerning orders for reinstatement, re-employment, remuneration and compensation; 3. It is plain from the terms and the orders made by the IR Commissioner that the IRC performed judicial functions when it exercised the jurisdiction that was invoked by the plaintiff in that forum; 4. The rules of procedural fairness applied to the IRC proceedings; 5. The IR Commissioner determined the dispute between the parties in that forum in a lengthy and carefully reasoned analysis that took all relevant matters into account, including evidentiary and legal issues, in a reasoned approach to the exercise of the discretion, as would be expected to be found in the judgment of a court: House v The King (1936) 55 CLR 499; [1936] HCA 40; 6. Whilst the Commissioner's decision was not specifically referred to as a judgment per se, the form and the content of the reasons for decision bear all the hallmarks or indicia of a reasoned judgment, as did the decision of the Full Bench of the IRC on appeal from that first instance decision; 7. The IRC proceedings resulted in a finding that the employer's decision to dismiss the respondent plaintiff from his employment was harsh. This led to subsequent enforceable orders being made that bound the parties, in respect of which contempt provisions applied in the event of non-compliance, as if the proceedings were decided by the Supreme Court of NSW; 8. The effect of the orders made by the IRC had the indisputable effect of finally quelling all elements of the dispute that subsisted between the parties who were litigants before that Commission.
2. The respondent plaintiff's argument that the procedures of the IRC were informal in nature, and that the orders made were not the orders of a court, has no merit. Many courts and tribunals exercise judicial power in an informal context when exercising judicial powers and functions, for example, the Small Claims Division of the Local Court, NCAT, and the Children's Court, to name a few.
3. In my view, the respondent plaintiff's submission incorrectly seeks to distinguish the decision of the IRC by mischaracterising it as a non-judicial decision. For the above reasons, that submission must be rejected.

Whether advocate's immunity applied in the IRC proceedings

1. As the issue of advocate's immunity operates as an overarching sheltering defence which is dispositive in its effect as a complete answer to the claim in negligence, as would a defence pursuant to s 5O of the CL Act, in conformity with the authorities dealing with such defences, that issue should be determined at the outset, as the first consideration: Goode v Angland [2017] NSWCA 311, at [5] and [184]-[186].
2. In the administration of justice, immunity from suit is not just confined to advocates. It also extends to other participants in litigation, as was explained in Malik v McGeown [2007] NSWSC 1414, at [22]-[25], citing Giannarelli v Wraith (1988) 165 CLR 543; [1988] HCA 52, at pp 557-558, and D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12, at [192].
3. There are recognised limits on the extent to which a court can entertain a case which seeks to litigate the manner in which another case was litigated where the earlier proceedings had the effect of finally quelling the factual and legal dispute that subsisted between the parties to those earlier proceedings: D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12.
4. Returning then to the question of whether immunity from suit applies to proceedings before a commission or a tribunal, the parties have indicated that question is yet to be determined by a court. In those circumstances, having regard to the indicia of a judgment as identified at paragraph [33] above, I consider the approach identified at paragraph [36] above is the correct approach.
5. I am reinforced in that view by the authorities to which the applicant defendant has made reference, as follows: 1. In Boland v Yates Property Corporation Pty Ltd [1999] HCA 64, at [150], the discussion on immunity referred to "proceedings before a court or like tribunal". The IRC is a "like tribunal"; 2. In Iverson v Howen [2008] NSWSC 1246, at [27]-[31], in a case that raised issues that were litigated in the Federal Industrial Relations Commission, although the Court did not have to decide the question of whether advocate's immunity applied in that case, the applicability of such immunity in the context of a commission was not called into question; 3. In Leerdam & Anor v Noori & Anor [2009] NSWCA 90, at [24], in proceedings before the Administrative Appeals Tribunal, the duties of a solicitor to the Tribunal were said to be arguably analogous to the duty owed to a court.
6. That series of statements is informative and serves to persuade me that the submission made by the respondent plaintiff seeking to distinguish between a tribunal constituted as a commission and a court, should not be accepted.
7. The respondent plaintiff's claim against the applicant defendant is in effect something of a collateral attack on the outcome of disputed proceedings that were quelled by the decision of the IRC, including in an appeal in that jurisdiction. In my assessment, that attack offends the principle of the need for finality of litigation once the appeal process has concluded.
8. The statement in Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16, to the effect that advocate's immunity does not apply in every case, must be read subject to the remarks at paragraph [102] of that decision, namely, that re-litigation of disputes already judicially quelled is an impermissible collateral threat to the finality of litigation whenever a client alleges that but for their lawyer's negligence, a judicial determination would have been different: See D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12, at [66].
9. For the reasons outlined above, the submission to the effect that the IRC was not exercising judicial power when determining the dispute before it must be rejected.
10. It follows that the sheltering principles of advocate's immunity applies to the conduct of the proceedings that were before the IRC. Accordingly, the present claim by the respondent plaintiff has no arguable basis: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69.
11. The respondent plaintiff's statement of claim and therefore the proceedings must be dismissed.

Conclusion

1. The applicant defendant has established his entitlement to have the respondent plaintiff's statement of claim and proceedings dismissed. Costs should follow that event.

Orders

1. I make the following orders: 1. Pursuant to UCPR r 13.4 and r 14.28, the respondent plaintiff's statement of claim and the plaintiff's proceedings are dismissed; 2. The respondent plaintiff is to pay the applicant defendant's costs of this notice of motion and the dismissed proceedings on the ordinary basis; 3. Liberty to apply on 7 days' notice if further or other orders are required.

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: 01 November 2021