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[2014] VSCA 74
Court of Appeal (Vic)
2014-04-16
Mr J, Maxwell P, Tate JA
Original judgment source is linked above.
S APCI 2013 0051: Shaw v Gadens (Unreported, County Court of Victoria, Judge Macnamara, 29 March 2012);
S APCI 2013 0055: Shaw v Rigby Cooke Lawyers [2013] VCC 427
LEGAL PRACTITIONERS - Solicitors - Complaint by dissatisfied client about negligent performance - Complaint to Legal Services Commissioner - Dispute referred to Victorian Civil and Administrative Tribunal - Complaint upheld in part, otherwise dismissed - Appeal from Tribunal to Supreme Court on question of law - Appeal dismissed - Client commenced common law proceedings against solicitors alleging negligence - Proceedings stayed - Whether open to relitigate matters determined by Tribunal - Whether statutory provisions contemplated re-litigation - Res judicata - Issue estoppel - Anshun estoppel - Client estopped from bringing court proceedings - Appeal dismissed - Legal Profession Act 2004 (Vic) pts 4.2, 4.3; Fair Trading Act 1999 (Vic) ss 8, 9, 12, 111.
STATUTORY INTERPRETATION - Presumptions - Presumption against infringement of common law rights - Principle of finality in litigation - Right not to be sued twice - Res judicata - Issue estoppel - Anshun estoppel - Complaints against solicitors - Procedure for administrative tribunal to determine complaints - Whether dissatisfied client able to sue at common law in respect of matters determined by tribunal - Common law doctrines not excluded - Estoppels applicable - No right to sue - Legal Profession Act 2004 (Vic) pts 4.2, 4.3.
**1 These appeals concern complaints by the appellant, Mr Shaw, against two firms of solicitors about the performance of their respective retainers. The firms acted - in succession - on Mr Shaw's behalf in connection with Supreme Court proceedings in which he was unsuccessful. Mr Shaw was (and remains) dissatisfied with the performance of both firms.
2 The appeals are not, however, concerned with the merits of Mr Shaw's complaints. Rather, they raise for consideration the provisions of the Legal Profession Act 2004 (Vic) (the 'LPA') which enable such complaints to be adjudicated by the Victorian Civil and Administrative Tribunal (the 'Tribunal'). The Tribunal performs this function as successor to the former Legal Profession Tribunal.
3 As will appear, Mr Shaw brought separate proceedings in the Tribunal against each firm. Those proceedings were, except in two limited respects, unsuccessful. In each case, Mr Shaw then applied under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the 'VCAT Act') for leave to appeal on a question of law from the Tribunal decision. Those applications also failed, both at first instance and on appeal.
4 Mr Shaw has now instituted common law proceedings against each firm, in which he seeks to re-litigate matters already dealt with by the Tribunal in the respective proceedings under the LPA. He relies on a provision of the LPA,[1] which provides as follows:**
A compensation order does not affect the right of a complainant to recover damages for pecuniary loss, but a court in making an award of damages must take the compensation order into account.
**5 Mr Shaw maintains that this provision removes any barrier which might otherwise exist to the re-litigation in a common law proceeding of complaints already dealt with by the Tribunal. In each proceeding, however, the defendant firm has successfully applied for a stay, on the ground that the provision does not contemplate, and does not authorise, such re-litigation.
6 For reasons which follow, I would dismiss Mr Shaw's appeals against the respective stay orders. In my opinion, the provision in question was intended to preserve a limited opportunity for a successful claimant in the Tribunal to obtain an award of damages in excess of the $25,000 jurisdictional limit of the Tribunal, but was not otherwise intended to affect the applicability of the common law principles of res judicata, issue estoppel and Anshun estoppel.**
**7 In March 2000, Mr Shaw entered a contract with a developer to purchase a unit 'off the plan' at Docklands. Subsequently, because of unsatisfied complaints which Mr Shaw had regarding the construction of his unit, he refused to settle the contract. The developer served notice of rescission of the contract, and Mr Shaw in turn lodged a caveat on the property.
8 Mr Shaw engaged Gadens Lawyers ('Gadens') to act on his behalf. On 1 December 2003, Gadens issued a Supreme Court proceeding on behalf of Mr Shaw, seeking declarations that the contract of sale gave him the interest claimed in the caveat, and that because the unit had not been satisfactorily completed, the vendor was not entitled to rescind the contract.
9 In January 2005, Gadens terminated their retainer. In April 2005, Mr Shaw retained Rigby Cooke Lawyers ('Rigby Cooke') to prepare the Supreme Court proceeding for trial. The trial commenced on 9 February 2006. On 23 February 2006, Mr Shaw's claim was dismissed.[2] He was subsequently ordered to pay the developer's costs on an indemnity basis. On 15 December 2006, the Court of Appeal dismissed Mr Shaw's appeal,[3] and in March 2007 he was ordered to pay the developer's costs of the appeal.[4]
10 For the past seven years, Mr Shaw has been engaged in proceedings of various kinds against both Gadens and Rigby Cooke, seeking compensation for what he contends was the unsatisfactory performance of their respective retainers. In sequence, Mr Shaw:**
**11 In March 2012, Gadens applied successfully to the County Court (Judge Macnamara) for an order striking out the statement of claim and staying the proceeding against it, on the ground that Mr Shaw was seeking to re-litigate issues which had been finally determined by the Tribunal.[6] On 15 June 2012, this Court (Warren CJ and Mandie AJA) granted Mr Shaw leave to appeal against that decision.[7]
12 In April 2013, Rigby Cooke applied successfully to the County Court (Judge Cohen) for a stay of the proceeding against it, also on the ground that Mr Shaw was seeking to re-litigate issues which had been determined in the corresponding Tribunal proceeding.[8] Mr Shaw's application for leave to appeal from Judge Cohen's decision was referred to this Court, for hearing together with Mr Shaw's appeal against Judge Macnamara's decision striking out his statement of claim in the Gadens proceeding and staying that proceeding.
13 For reasons which follow, I would dismiss the appeal from the decision staying the Gadens proceeding, and I would refuse leave to appeal from the decision staying the Rigby Cooke proceeding.**
**14 On 2 October 2003, Mr Shaw engaged Gadens to act for him in the dispute with the developer. At that time, as mentioned earlier, he was the subject of a rescission notice which was due to expire on 14 October 2003. On 8 October 2003, Gadens gave Mr Shaw advice about his options in the light of the rescission notice, which included a recommendation that he lodge a caveat of the property to prevent a resale. The caveat was lodged on 10 October 2003. Meanwhile, Mr Shaw continued to negotiate with the vendor. Time expired under the rescission notice, however, without Mr Shaw paying the balance of purchase moneys.
15 On 28 October 2003, the Registrar of Titles served notice on Mr Shaw under s 89A of the Transfer of Land Act 1958 (Vic), requiring him to commence proceedings within 35 days to justify his caveat. On 1 December 2003, Mr Shaw instructed Gadens to commence proceedings in the Supreme Court. On 4 February 2005, Gadens ceased to act for Mr Shaw.
16 On 21 June 2006, Mr Shaw complained to the Legal Ombudsman about the conduct of Gadens during the pendency of the retainer. Subsequently, the Legal Services Commissioner (the 'Commissioner') found the dispute unsuitable for resolution and referred it to the Tribunal under s 4.3.15 of the LPA.
17 On 12 March 2008, Mr Shaw applied to the Tribunal for orders against Gadens under s 4.3.17 of the LPA, contending that there was a civil dispute between them. He sought:**
(a) the sum of $25,000 by way of compensation, that being the maximum available under the LPA;
(c) an order for specified free legal services; and
(d) reimbursement of the costs he had paid to the developer in the Supreme Court proceeding.
**18 The Tribunal proceeding was heard by Senior Member Howell over three days in September 2008. On 6 November 2008, the Tribunal dismissed the application. The Tribunal concluded that there had been no negligence on the part of Gadens and, alternatively, that even if the advice was negligent, it had caused Mr Shaw no financial loss.[9] Leave to appeal against those orders was refused.
19 Subsequently, Mr Shaw issued proceedings in the Supreme Court against Gadens, seeking damages for negligence. That claim was transferred to the County Court under pt 5 of the Courts (Case Transfer) Act 1991 (Vic). In March 2012, as already mentioned, Gadens successfully applied in the County Court to have the statement of claim struck out and the proceedings stayed.**
**20 On 14 April 2005, Mr Shaw retained Rigby Cooke to act for him in the Supreme Court proceeding. From then until February 2006, Rigby Cooke proofed witnesses, prepared witness statements, drafted court documents, retained counsel to act for Mr Shaw, conducted negotiations on his behalf and generally prepared the matter for trial.
21 The trial began on 9 February 2006. On the initiative of the trial judge, but with the consent of Mr Shaw's counsel, there was a trial of a preliminary question as to whether the Domestic Building Contracts Act 1995 (Vic) applied to 'off the plan' contracts of sale. It was common ground that, unless that Act was applicable, the developer had been entitled to rescind the contract of sale. On 23 February 2006, Bell J found that the Act did not apply.[10] The other causes of action in Mr Shaw's statement of claim were dismissed by consent of the solicitors. The contract was held to have been validly rescinded and Mr Shaw forfeited his deposit.
22 Rigby Cooke continued to act for Mr Shaw thereafter, filing an appeal on his behalf from the decision of Bell J, retaining senior counsel to settle the notice of appeal, and attending to the necessary interlocutory steps. In August 2006, there was a dispute between Mr Shaw and Rigby Cooke regarding the conduct of the trial, preparation for the appeal and the fees charged by Rigby Cooke. This dispute resulted in termination of the retainer of Rigby Cooke on 15 August 2006, approximately two weeks before the appeal was due to be heard.
23 Mr Shaw then engaged other solicitors, who briefed counsel to represent Mr Shaw in the appeal. The appeal was heard on 29 August 2006 and subsequently dismissed.[11]
24 Mr Shaw complained to the Legal Ombudsman about the conduct of Rigby Cooke while the firm was acting for him. The complaint subsequently came before the Commissioner, who found the dispute to be unsuitable for resolution, and referred it to the Tribunal under s 4.3.15 of the LPA.
25 On 25 May 2007, Mr Shaw applied to the Tribunal for orders against Rigby Cooke under s 4.3.17 of the LPA, contending that there was a civil dispute between them, and seeking:**
(a) the sum of $25 000 by way of compensation, that being the maximum available under the LPA;
(c) an order for specified free legal services; and
(d) reimbursement of the costs he had paid to the developer in the Supreme Court proceeding.
26 Mr Shaw's original application alleged that Rigby Cooke had been negligent in:
**In detailed particulars filed subsequently, Mr Shaw identified 17 discrete areas of conduct by Rigby Cooke which were said to have constituted negligence and to have caused him pecuniary loss.
27 Mr Shaw's claim against Rigby Cooke was also heard by Senior Member Howell. The hearing took place over six days, in February and March 2009. On 11 February 2009, Rigby Cooke sought leave to file a counterclaim in the Tribunal to recover unpaid legal fees. Leave was refused, on the ground that the amount of the counterclaim exceeded the jurisdictional limit.[12] Instead, the Tribunal granted Rigby Cooke leave to issue a separate proceeding under the Fair Trading Act 1999 (Vic) ('FTA') to recover those fees. There is no jurisdictional limit under the FTA.
28 Mr Shaw responded by issuing his own defence and counterclaim under the FTA. As the Tribunal noted, the defence repeated most of the claims made by Mr Shaw in his application under the LPA. There were three new claims, however. One was a claim for 'exemplary damages', based on what was said to be unconscionable conduct (FTA s 8) and misleading and deceptive conduct (FTA s 9). Another was a claim that Rigby Cooke had contravened s 12 of the FTA by making a false representation in relation to the provision of legal services.
29 The Tribunal refused Mr Shaw's application to issue a counterclaim under the FTA, on the ground that it would be unfair to subject Rigby Cooke to a significantly increased claim for compensation, in circumstances where they had prepared for a hearing in the belief that the maximum compensation for which they might be liable was fixed by the LPA at $25,000. On the last day of the Tribunal hearing, however, Mr Shaw lodged his own application under the FTA. The application repeated the claims made in the LPA application and in the defence to Rigby Cooke's FTA claim. Mr Shaw sought an order pursuant to s 108(2)(b) of the FTA that Rigby Cooke pay damages of $750,000.
30 In lengthy and detailed reasons published on 5 August 2009,[13] the Tribunal considered each of Mr Shaw's complaints against Rigby Cooke separately. In two limited respects, the Tribunal upheld his complaints. It found that Rigby Cooke had acted negligently in not filing submissions promptly with the Court of Appeal, leading to an adverse costs order against Mr Shaw; and in not providing documents promptly to an expert witness.[14]
31 The Tribunal awarded Mr Shaw the sum of $6,240 in respect of those findings. That amount was ordered to be set off against the total amount of fees found to be owing to Rigby Cooke, which was $38,926.90. The claims under the LPA, and under the FTA, were otherwise dismissed.**
32 As already noted, Mr Shaw's successive complaints - the first against Gadens, the second against Rigby Cooke - came before the Tribunal in accordance with the provisions of the LPA. The relevant provisions of that Act are as follows:
4.2.2 Civil complaints and disputes
(1) A civil complaint is a complaint about conduct to which this Chapter applies, to the extent that the complaint involves a civil dispute.
(2) A civil dispute is any of the following -
(a) a dispute (costs dispute) in relation to legal costs not exceeding $25,000 in respect of any one matter -
(i) between a law practice or an Australian legal practitioner and a person who is charged with those costs or is liable to pay those costs (other than under a court or tribunal order for costs); or
(ii) between a law practice or an Australian legal practitioner and a beneficiary under a will or trust in relation to which the law practice or practitioner has provided legal services in respect of which those costs are charged;
(b) a claim that a person has suffered pecuniary losses as a result of an act or omission by a law practice or an Australian legal practitioner in the provision of legal services to the person, other than loss in respect of which a claim lies against the Fidelity Fund;
(c) any other genuine dispute between a person and a law practice or an Australian legal practitioner arising out of, or in relation to, the provision of legal services to the person by the law practice or practitioner.
(3) A civil complaint may be made about the conduct of a law practice or an Australian legal practitioner.
4.3.2 Effect of complaint on other proceedings
(1) Subject to subsection (2) -
(a) a law practice or an Australian legal practitioner must not commence proceedings in relation to the subject-matter of a civil dispute between a person and the practice or practitioner after the practice or practitioner has received notice under section 4.2.8 of a civil complaint about the conduct of the practice or practitioner in respect of the dispute;
(b) a law practice of which an Australian legal practitioner is an associate must not commence proceedings in relation to the subject-matter of a civil dispute between a person and the practitioner after the practitioner has received notice under section 4.2.8 of a civil complaint about the conduct of the practitioner in respect of the dispute;
(c) a complainant must not commence proceedings against a law practice or an Australian legal practitioner in relation to the subject-matter of a civil dispute with the practice or practitioner after the complainant has made a civil complaint about the conduct of the practice or practitioner in respect of the dispute -
until the complaint is determined or dismissed and any appeal rights are exhausted.
4.3.6 What happens if civil dispute is unsuitable for resolution by Commissioner?
If the Commissioner considers that a civil dispute is unlikely to be resolved, or is not suitable for resolution by the Commissioner, the Commissioner must give written notice to each party -
(a) stating that the civil dispute is not likely to be resolved or is unsuitable for resolution by the Commissioner; and
(b) setting out the party's right to apply to the Tribunal under section 4.3.15.
4.3.15 Application to Tribunal
(1) The following may apply to the Tribunal for resolution of a civil dispute that is the subject of a civil complaint -
(a) a party to the dispute to whom the Commissioner gives notice under section 4.3.6 or 4.3.7; or
(b) the complainant who has received a notice under section 4.3.13(2)(b).
...
4.3.17 What may the Tribunal order?
(1) The Tribunal may make any one or more of the following orders in relation to a civil dispute that is the subject of an application -
(a) an order that the law practice or Australian legal practitioner, or any law practice of which the practitioner is an associate, pay to the complainant as compensation a specified amount not exceeding $25 000 within a specified time (compensation order);
(b) in a costs dispute -
(i) an order that the complainant pay the amount of legal costs in dispute or that the amount of legal costs be reduced by a specified amount (not exceeding the amount in dispute);
(ii) an order that the complainant pay interest on the amount of legal costs in dispute at a rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983;
(c) an order that the law practice or Australian legal practitioner, or any law practice of which the practitioner is an associate, waive or repay the whole or a specified part of legal costs charged to the complainant for any specified legal services;
(d) an order that the law practice or Australian legal practitioner, or any law practice of which the practitioner is an associate, provide specified legal services to the complainant either free of charge or at a specified cost;
(e) an order that the law practice or Australian legal practitioner, or any law practice of which the practitioner is an associate, waive any lien held over documents belonging to the complainant and deliver the documents to the complainant within a specified time;
(f) any other order the Tribunal thinks fit.
33 The Tribunal thus has power under s 4.3.17(1)(a) to make a compensation order up to a ceiling of $25,000. The present proceedings concern another provision of the LPA, which deals specifically with compensation orders as follows:
4.2.14 Compensation orders
(1) A compensation order may not be made in respect of any loss for which the complainant has received, or is entitled to receive, compensation under an order made by a court or tribunal or a payment from the Fidelity Fund.
(2) A compensation order does not affect the right of a complainant to recover damages for pecuniary loss, but a court in making an award of damages must take the compensation order into account.[15]
**34 Mr Shaw's principal argument in both proceedings is that the last of these provisions, s 4.2.14(2) ('the saving provision'), removes any barrier that might otherwise exist to his bringing a claim against a law practice in respect of matters adjudicated in a Tribunal proceeding between himself and that law practice. (Separate arguments are raised with respect to the FTA claims which were litigated in the Tribunal between Mr Shaw and Rigby Cooke. I will deal with those later in these reasons.)
35 Mr Shaw submits that, by enacting the saving provision, the Parliament has:**
[S]pecifically recognised that a statutory LPA claim heard at VCAT is permitted to be also litigated as [a] common law claim in a court of competent jurisdiction.
He also points to s 4.3.2(1)(c), which he says reflects a recognition by the legislature that claims initially determined at the Tribunal may be subject to further litigation in court. Mr Shaw points out that he complied with that provision by refraining from commencing his common law proceedings until he had exhausted his appeal rights from the respective Tribunal decisions.
**36 Mr Shaw relies on a decision of this Court in Louis v Galbally & O'Bryan.[16] In that case, Mr Louis had brought a claim against the respondent law firm in the Legal Profession Tribunal, as it was constituted under the former Legal Practice Act 1996 (Vic). His claim in the Tribunal was for the maximum amount of compensation then available, being the sum of $15,000. The solicitors applied successfully to the Tribunal (and to the Full Tribunal) to have the dispute dismissed on the ground that the subject matter would be more appropriately dealt with by a court.
37 Mr Louis appealed against that dismissal. This Court held that the Full Tribunal ought to have concluded that his cause of action in contract was already statute-barred. That being so, the Court held, it was not open to the Tribunal to conclude that it was more appropriate for Mr Louis' claim against the solicitors to be dealt with by a court. The Court therefore substituted for the Tribunal's order an order dismissing the solicitors' application.
38 The Court (Maxwell P and Whelan AJA) continued:**
Before parting with the matter, we need to deal with certain other proceedings which have been either instituted or foreshadowed by Mr Louis, as they were the subject of submissions to us by counsel for the respondent. The Tribunal at first instance referred to Mr Louis' avowed intention to sue at law, having (as he hoped he would) obtained the maximum compensation of $15,000 from the Tribunal in its determination of his LPA dispute. Counsel for the respondent helpfully pointed out to us that s 133(2) LPA expressly permits two bites at the compensation cherry.
...
(2) A compensation order does not affect the right of a client to recover damages for pecuniary loss, but a court in making an award of damages must take the compensation order into account.
The learned Member took the view - understandably - that it would be most unfortunate to have the same issues of fact litigated in full twice, in order for Mr Louis to pursue compensation in excess of $15,000. Plainly enough, the LPA permits such duality of proceedings. Whether that is good policy or not, given the desirability of finality in litigation, is a matter for the legislature. It does seem an odd thing that what amounts to the same action against the solicitors could be prosecuted in full on two separate occasions. It would seem preferable if a person in Mr Louis' position were required to make an election - whether to go to the Tribunal for an informal, speedy process or to court for a longer, more formal process. In the present case, the prospect of double litigation was undoubtedly a relevant factor, though once the limitation issue was properly understood the likelihood of subsequent court litigation ought to have been assessed as rather remote.[17]
**39 Nothing said by the Court in Louis affects the resolution of the present question. As will be apparent from the foregoing description, the Court in Louis was not required to consider the scope of any subsequent court proceeding brought in reliance on the saving provision. No such proceeding had been instituted.
40 It cannot be doubted that s 4.2.14(2) of the LPA (which is in identical terms to the former s 133(2)) contemplates a 'duality of proceedings'. What must now be decided is what kind of (subsequent) proceeding Parliament had in contemplation when it enacted the provision.**
The Gadens proceeding - decision of Judge Macnamara
41 As pleaded, Mr Shaw's common law proceeding against Gadens alleges:
42 The stay application brought by Gadens was founded on issue estoppel. Counsel for Gadens relied on the following statement of Fullagar J in Jackson v Goldsmith,[18] explaining the distinction between res judicata and issue estoppel:
The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims 'interest reipublicae ut sit finis litium' and 'nemo debet bis vexari pro eadem causa'.
The rule as to issue estoppel is generally stated in the words of Lord Ellenborough in Outram v Morewood. His Lordship said that parties and privies are 'precluded from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them ... has been, on such issue joined, solemnly found against them.' This is, I think, a true case of estoppel, analogous to estoppel by deed and estoppel by representation. The same rule was concisely stated by Dixon J in Blair v Curran where his Honour said:
A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.
**43 The submission for Mr Shaw was that, by operation of the saving provision, he was entitled to have his complaints against Gadens adjudicated fully in the Tribunal and then again - fully - in the Court. The two proceedings were independent of one another, and a determination of the Tribunal created no estoppel of any kind.
44 His Honour upheld the Gadens submission, giving the following reasons:**
The operation of s 4.2.14(2) may affect the operation of the doctrine of res judicata or cause of action estoppel, which deals only with the actual determination which a court or tribunal has made, but says nothing as to the evidentiary operation of matters of true estoppel, such as issue estoppel. The result would therefore seem to be that if an aggrieved client secures a finding of negligence against his solicitor in a hearing at VCAT, that is issue estoppel which would bind those parties and their privies in a subsequent proceeding brought in court in reliance on section 4.2.14, and the solicitor would not be entitled to contend in court that he was not negligent.
...
In my view, since [the Tribunal] has made a finding excluding negligence relative to the performance of Gadens in their work for Mr Shaw relative to these matters[,] That [sic] finding applies not just to the particular matters that he mentioned in his decision, but as to all particulars that might be urged in support of a finding of negligence. Or, indeed, all matters that were urged upon [the Tribunal], but not dealt with, or dealt with adequately, as Mr Shaw would see it.
If [the Tribunal] failed to deal adequately with matters, ignored evidence, or misapprehended evidence, or misdirected himself as to the law of negligence, the remedy was to seek leave to appeal. In fact there was an application for leave to appeal which was unsuccessful both before a judge of the Supreme Court and the Court of Appeal. That material was not placed before me as a result of objections raised by Mr Shaw, so what matters were or were not canvassed in those leave applications, I do not know.
What is clear for present purposes, however, is that Mr Howell's decision is final in the sense that it has been published as a final determination of the tribunal, and the entitlements for leave to appeal have been exhausted.
In my view therefore there exists an issue estoppel precluding Mr Shaw from contending - based on any particular list of particulars - that Gadens conducted themselves negligently relative to his matters as described in Mr Howell's determination. Further, there is an issue estoppel to the effect of precluding Mr Shaw from contending that he has suffered any loss as a result of negligence on the part of Gadens in executing their work for him in the matters described in the determination of Mr Howell.
A further estoppel is created precluding Mr Shaw from contending that Gadens wrongfully discharged themselves from performance of their retainer. Mr Shaw said that Mr Howell concentrated on a termination of retainer in April, whereas his findings were not apt to justify a termination in January of 2005.
The passage which I quoted earlier indicates that Mr Howell certainly had in mind a finding that whatever Gadens did to discharge themselves in January 2005 was properly done, and not illegally done. The estoppel therefore extends to however the discharge of themselves from the retainer was effected by Gadens and as at whatever date.
The amended statement of claim which has been filed by Mr Shaw raises a number of causes of action other than negligence. He alleges unconscionable conduct, misleading and deceptive conduct and breaches of various contractual duties other than a duty to carry out work with due care. These various matters are multifarious and extensive and I do not propose prolonging these reasons by referring to them.
Mr Shaw has correctly said that an issue estoppel will operate only if it is precise. Whilst I am generally attracted to the view that Mr Howell's determination was made on a very general basis and there might be much to be said for the view that to the extent that he referred to negligence, he might be taken to merely have meant not just negligence in the strict sense of the tort of negligence but breaches of duty generally.
However, if he was using language in that manner, it would in my view be of insufficient precision to justify regarding there to have been established an issue estoppel relative to any conceivable breach of duty or wrongful act.
Therefore, in my view, as to these matters going beyond the cause of action [in] negligence, there is no issue estoppel precluding Mr Shaw from pressing claims relative to those.
There is, however, a caveat to the generality of that statement. Where, for instance, it is contended that Gadens acted unconscionably in discharging themselves as they undoubtedly did and we have an issue estoppel to the effect that Gadens lawfully discharged themselves, it seems to me, as I understand the authorities on unconscionability, that it cannot amount to unconscionable conduct to exercise a legal right which one is entitled to exercise.
That being the case, the issue estoppel precluding Mr Shaw from contending that Gadens acted wrongfully in discharging themselves necessarily also precludes them from contending that they thereby engaged in unconscionable conduct.[19]
**45 Accordingly, his Honour made orders staying the proceedings in relation 'to the following issues ... which were the subject of a final decision by the Tribunal':
(a) any claim alleging negligence against Gadens in the performance of its retainer with Mr Shaw;
(b) any claim alleging that Gadens wrongfully terminated the retainer;
(c) any claim that Mr Shaw suffered any loss or damage as a consequence of Gadens' performance of the retainer; and
(d) any claim of unconscionability arising out of Gadens' termination of the retainer.**
The Rigby Cooke proceeding - decision of Judge Cohen
**46 The claims advanced by Mr Shaw in his statement of claim in the Rigby Cooke proceeding are of the same character as the claims in the Gadens proceeding, although the particular matters complained of are of course quite different. After comparing the allegations advanced in the Tribunal with those set out in the statement of claim, Judge Cohen concluded that the causes of action in negligence and contract were 'essentially the same as those aired in the VCAT proceeding'.[20]
47 Her Honour noted that Rigby Cooke's defence was 'based on the concept that there must at some stage be an end to litigation between the same parties as to the same disputes'.[21] Both res judicata and issue estoppel were relied on.
48 As noted earlier, Mr Shaw's claims were adjudicated by the Tribunal under the FTA as well as under the LPA. Her Honour's stay ruling concentrated on the statutory bar contained in s 111 of the FTA, which provides:**
111 Exclusion of other jurisdiction
(1) Once an application has been made to the Tribunal in accordance with the Victorian Civil and Administrative Tribunal Act 1998 in respect of a fair trading dispute or in respect of any other matter in respect of which the Tribunal has jurisdiction under this Act, the issues in dispute are not justiciable at any time by a court unless -
(a) the proceeding in that court was commenced before the application to the Tribunal was made and that proceeding is still pending; or
(b) the application to the Tribunal is withdrawn or struck out for want of jurisdiction.
(2) Sub-section (1) applies to all the issues in dispute, whether as shown in the application or emerging in the course of the proceeding in the Tribunal.
In my view this section is a clear statutory bar to re-litigation of issues decided under a FTA claim at VCAT. It is not circumscribed by precise causes of action, but deal [sic] with all issues whether originally claimed or emerging during the hearing. I am satisfied that on its plain language it applies to all of the claims the subject of [Mr Shaw's FTA application].
...
I am satisfied that the terms of s 111 Fair Trading Act apply to all of Mr Shaw's case, and make it not justiciable in this court, except for one issue. When leave to bring the FTA application was granted on 18/3/09, it was on the specific requirement that he omit the paragraphs alleging negligence by Rigby Cooke relating to the briefing of [counsel]. Notwithstanding that the Tribunal's decision did deal with those allegations, and s 111 includes issues not shown in the application but emerging in the hearing, I accept that Mr Shaw thought that he had been excluded from raising those allegations and did not put arguments about them in his submissions.[22]
50 Her Honour also held that res judicata was applicable, on the basis that the causes of action sought to be advanced in the Court proceeding were essentially the same as those advanced in the Tribunal claim under the FTA.[23] Her Honour did not find it necessary to consider the applicability of either issue estoppel or Anshun estoppel.[24]
**51 The task of the Court is to ascertain the intention of Parliament by examining the statutory language in its context. As will appear, what makes the construction of s 4.2.14(2) difficult is that Parliament has left so much unsaid.
A compensation order does not affect the right of the complainant to recover damages for pecuniary loss ...
What is not made explicit is the scope of the 'right' which Parliament wished to preserve. As already noted, Mr Shaw's contention is that the subsection preserves the right of a complainant to bring common law proceedings against a law practice, unconstrained by anything decided in Tribunal proceedings between the complainant and the law practice.
53 On Mr Shaw's construction, a dissatisfied client who has litigated an LPA claim against a law practice to its conclusion in the Tribunal can proceed to sue the same law practice at common law in connection with the same subject-matter:
(a) even though the Tribunal has made no compensation order in the client's favour; and
(b) in respect of acts or omissions which the Tribunal has found involved no fault on the part of the solicitors and hence gave no right to compensation; and
(c) in respect of acts or omissions alleged to have occurred in the course of the performance of the retainer between the client and the practice, but which were not raised before the Tribunal and hence were not adjudicated upon.
**54 According to Mr Shaw, therefore, Parliament intended that a dissatisfied client, having failed entirely in the Tribunal, would be free to re-litigate in court all of the same complaints. The client would be free, moreover, to litigate any other complaints relating to the same retainer which had not previously been ventilated.
55 Parliament could, of course, have made provision for re-litigation of that kind, although it is difficult to imagine what public or social policy objective such a system might have been thought to serve. Ordinarily, when Parliament confers jurisdiction on the Tribunal, that jurisdiction supplants, and excludes, any corresponding jurisdiction formerly exercised by a court. In such circumstances, a claimant who wishes to invoke the relevant jurisdiction will have no alternative but to proceed in the Tribunal, and will have no option to litigate the matter afresh in Court. The present question arises because - atypically - the saving provision contemplates some form of recourse to the courts (other than by way of appeal) following the completion of a proceeding before the Tribunal.
56 As I have said, the Court's task is to discern the legislative intention conveyed by the words used in the statute. As the High Court said in its unanimous judgment in Zheng v Cai:[25]**
[J]udicial findings as to legislative intention are an expression of the constitutional relationship between the arms of government with respect to the making, interpretation and application of laws ... [T]he preferred construction by the court of the statute in question is reached by the application of rules of interpretation accepted by all arms of government in the system of representative democracy.
57 One of the foundational rules of interpretation is that Parliament is not to be taken to have altered the common law unless its intention to do so is made unambiguously clear by the statutory language used. As O'Connor J said in Potter v Minahan:[26]
It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used.[27]
58 Of direct relevance to the present question is the following statement by Burchett and Ryan JJ in Thompson v Australian Capital Television Pty Ltd:[28]
Statutory reforms removing a particular plank from the edifice of the common law do not necessarily bring down whole sections of the structure just because a rule expressly changed or abolished had an historical or a logical connection with other rules of the common law. To forbid such a consequence the rule has been established (and should be adhered to ...) that Acts altering the common law should be construed as doing so only so far as is necessary to give effect to their provisions.[29]
59 In the present case, the established principle of finality in litigation forms part of the common law background against which a provision of this kind must be construed.[30] Three common law principles are relevant here, those concerning (respectively) res judicata, issue estoppel and what is conventionally known as Anshun estoppel. These principles may be shortly summarised as follows:
60 Each of these estoppels is founded on the same principles of public policy, that there is a public interest in there being an end to litigation and that no person should be twice sued for the same cause. In Lambidis v Commissioner of Police,[34] Priestley JA (with whom Kirby P and Powell JA agreed) said:
[A]mong the public policy reasons common to both res judicata and issue estoppel are the protection of parties from unnecessary relitigation and the avoidance of the expense, inconvenience and anxiety involved in the same persons fighting a second time on an issue already decided between them. These ends are for the benefit of the efficiency and finances of the State and its heavily burdened and expensive to run courts and tribunals, as well as for individuals.[35]
61 Although the Anshun doctrine relates to matters not previously litigated, it is founded on the same considerations of public policy. As Marshall J said in Foodco Group Pty Ltd v Northgan Pty Ltd:[36]
Broadly speaking, Anshun estoppel has its basis in three considerations of public policy. The first is the maxim nemo debet bis vexari pro eadem causa which translates as 'no man ought to be vexed twice for the same cause'...
The second public policy consideration is the maxim interest reipublicae sit finis litium which translates as `it concerns the State that there be an end to litigation ... Multiplicity of proceedings is undesirable. During the conduct of litigation, parties and their legal advisers should be cognisant of this fact. The prospect of costs being awarded against a party or solicitor personally, in the circumstances of multiple proceedings, should focus their minds on this issue ...
The third relevant public policy consideration is the undesirability of having conflicting judgments on the record.
62 In Ford Motor Company of Australia Ltd v Tristar Steering & Suspension Australia Ltd,[37] Goldberg J said:
[U]nderlying the Anshun principle is a public policy issue which may apply independently of the acts of the parties, namely that it is in the interests of the administration of justice that all issues which properly belong to the subject-matter of litigation be brought forward at the one time, not only to avoid the possibility of inconsistent decisions but also on the ground of providing for an efficient use of a scarce resource which is not infinite, namely, court resources and judicial time.[38]
63 These principles were first developed in relation to court proceedings. Unsurprisingly, however, the advent of administrative tribunals has resulted in the extension of the same principles to tribunal proceedings. In Lambidis, the New South Wales Court of Appeal held that both res judicata and issue estoppel applied to proceedings before an employee appeal tribunal. After referring (as set out in paragraph 58 above) to the public policy considerations, Priestley JA said:
[W]here tribunals, even though called administrative tribunals, are legislatively empowered to decide the competing claims of parties in a way which has legal effect, and where, in making such decisions it is necessary for them to decide identifiable disputed issues, there seems to me to be strong reason why such issues once decided should be treated as having been set to rest between the disputants.[39]
**64 For the same reasons, the principle of Anshun estoppel is capable of applying to administrative tribunals.[40] In the present case, it applies to the Tribunal, which is 'legislatively empowered to decide the competing claims of parties in a way which has legal effect'. That the principle has a broad field of operation is illustrated by the decision of this Court in Gibbs v Kinna,[41] where it was accepted that Anshun estoppel was capable of operating to prevent a person, whose employment complaint had been determined by a judicial registrar of the Industrial Relations Court, from re-litigating the complaint in the Magistrates' Court. In the particular circumstances of the case, however, the estoppel argument failed.
65 The combined effect of these common law principles is that a provider of legal services has a right not to be sued by the same client in more than one proceeding in relation to acts or omissions alleged to have been committed in the performance of the same contract of retainer. The Anshun principle extends the protection to matters which could have been, but were not, litigated in the first proceeding.
66 To the extent that the saving provision was intended to alter the common law position, this Court is bound to interpret the sub-section such that the infringement of the principle of finality is no greater than the words of the statute clearly require.[42] Adopting that approach, I consider that the saving provision was intended to infringe that principle only to a very limited degree, as follows.
67 In my opinion, Parliament intended to deal only with the constraint otherwise imposed on awards of compensation by the jurisdictional limit of $25,000. The saving provision was intended to enable a client who succeeded in a civil claim in the Tribunal against a law practice, and was awarded the maximum compensation of $25,000, to commence common law proceedings against the practice and to seek an award of damages for pecuniary loss over and above the sum already awarded. That claim would be limited to matters found by the Tribunal to constitute fault on the part of the law practice and, hence, to give rise to a right to compensation. (The corollary is that those findings of fault would not be able to be re-opened by the law practice in the Court proceeding.) With that limited exception, the common law principles would continue to apply.
68 It is important to point out that no client is obliged to litigate a complaint against a law practice in the Tribunal. The LPA simply provides clients with the option of proceeding in the Tribunal, rather than in a court. Each option has its own advantages and disadvantages. In particular, each has its own distinctive appeal rights.
69 Where - as here - the client proceeds in the Tribunal, then - as with all other Tribunal proceedings - the right of appeal is to the Supreme Court on a question of law only.[43] Mr Shaw exercised that right of appeal in relation to each of his Tribunal proceedings. If, on the other hand, the client issues proceedings in the County Court or Supreme Court, the usual rights of appeal apply.
70 Finally, it is necessary to say something about s 4.3.2(1)(c). As set out earlier,[44] that provision prevents a complainant, who has made a civil complaint under the LPA about the conduct of a law practice, from commencing proceedings against the practice**
in relation to the subject-matter of [the] civil dispute... until the complaint is determined or dismissed and any appeal rights are exhausted.
Read literally, this provision might be thought to oust the principle of res judicata, by implicitly permitting a complainant to litigate a complaint which had been dismissed. But the context in which it appears tells otherwise.
**71 The provision is one of several contained in s 4.3.2(1), all of which are intended to ensure the integrity of the LPA scheme for dealing with civil complaints. Their combined effect is that neither client nor law practice can litigate a matter while an LPA process is under way with respect to that matter. The provisions do not address the scope of any litigation which might subsequently be instituted.
72 It should be noted, further, that the Commissioner has power under s 4.2.10 to dismiss a complaint. None of the common law principles discussed above, in relation to a determination of the Tribunal, would prevent a complainant from commencing court proceedings following the dismissal of a complaint by the Commissioner. (As there was no dismissal of Mr Shaw's complaint by the Commissioner, this avenue is not open to Mr Shaw.)**
**73 It follows that the saving provision has no application to Mr Shaw in respect of either of his proceedings. The common law estoppels operate as a complete bar in each case.
74 In relation to the Tribunal proceeding against Gadens, the principles of res judicata and issue estoppel preclude Mr Shaw from re-litigating any matter litigated in the Tribunal. The principle of Anshun estoppel precludes him from litigating any other complaint, arising out of the Gadens retainer, which he could have litigated in the Tribunal proceeding.
75 A similar analysis applies to the Tribunal proceeding against Rigby Cooke. There was, as noted earlier, a small compensation order made in respect of two aspects of Mr Shaw's complaint. Res judicata and issue estoppel prevent Mr Shaw from re-litigating any of the claims which the Tribunal rejected. Issue estoppel applies to the question of how much compensation was payable on the claims which succeeded. Anshun estoppel prevents Mr Shaw from litigating any other complaint arising out of the retainer which he could have litigated in the Tribunal proceeding.
76 As to the Anshun point, it is important to point out that the LPA jurisdiction of the Tribunal which Mr Shaw invoked is very wide indeed. The definition of 'civil dispute' in s 4.2.2 means that it is open to a complainant to bring before the Tribunal any claim of pecuniary loss 'as a result of an act or omission by a law practice' and:**
any other genuine dispute between a person and a law practice ... arising out of, or in relation to, the provision of legal services to the person by the law practice ...[45]
The reasons of the Tribunal in each case demonstrate just how closely the performance of a law practice can be scrutinised in such a proceeding.
77 Accordingly, nothing turns on the fact that - in relation to the Rigby Cooke proceeding - the FTA itself provides an absolute bar to further proceedings. Since the matter was fully argued, however, I will proceed to deal with it.
**78 As noted earlier, in the course of the Rigby Cooke proceeding before the Tribunal, the Senior Member allowed Rigby Cooke to discontinue its counterclaim for fees based on the LPA, and to issue a new proceeding under the FTA. This course was taken at the Senior Member's suggestion, after he expressed concern that Rigby Cooke could not bring its counterclaim for unpaid fees under the LPA because the costs exceeded $25,000 and it was therefore not a 'costs dispute' within the meaning of the Act.
79 Following the discussion about Rigby Cooke issuing a new proceeding under the FTA, Mr Shaw sought to bring his own new proceeding under that Act. The Tribunal initially rejected the application, on the ground that it raised new claims and that the quantum of the claim would increase from $25,000 to more than $900,000. On the final day of the hearing, however, Rigby Cooke withdrew its opposition to Mr Shaw bringing a new claim under the FTA.
80 The Tribunal agreed to allow Mr Shaw to proceed with the new claim, on the basis that he would rely only on the evidence already given and would abandon claims against Rigby Cooke in respect of the retainer of counsel. Mr Shaw accepted those conditions, the Tribunal having warned him very clearly that the claims regarding the retainer of counsel, once abandoned, could never be revived. The Tribunal proceeded to determine Mr Shaw's FTA application on its merits, including the new claims, based on unconscionability and misleading and deceptive conduct.
81 In the Rigby Cooke appeal, Mr Shaw accepts that, if s 111 is enlivened, it operates to bar any further litigation against Rigby Cooke in respect of the matters the subject of his FTA claim as determined by the Tribunal. His submission, however, is that s 111 is not enlivened because 'fundamental requirements of the VCAT Act and Rules were breached during the hearing'.
(a) the Tribunal did not have power under s 82(4) of the VCAT Act to consolidate the LPA proceeding and the FTA proceeding, and hence evidence in one could not be treated as evidence in the other;
(b) the Tribunal made no finding that his claim had been determined as a claim under the FTA;
(c) there is no record of the Tribunal findings made under the FTA;
(d) as an unincorporated association, Rigby Cooke had no standing to appear in a Tribunal proceeding under the FTA; and
(e) 'The whole process was contrary to the principles of fairness and contravenes s 97 of the VCAT Act'.
83 It is unnecessary to investigate the merits of any of these claims. Quite simply, Mr Shaw is estopped from raising any of them in this proceeding. Mr Shaw had a right of appeal from the Tribunal's decision under s 148 of the VCAT Act. He exercised that right, first by application to Daly AsJ and subsequently on appeal to Sifris J. Each of those judicial officers dealt comprehensively with what Mr Shaw contended were the errors of law made by the Tribunal in the course of conducting the hearing and in making its determinations. The question of procedural fairness, as it related to the proceedings under the FTA, was expressly raised and adjudicated.[46] Any question concerning the Tribunal's jurisdiction to determine the applications under the FTA - including questions as to whether any 'application' had been made within the meaning of s 111 - fell to be determined, if at all, in an appeal under s 148.
84 Mr Shaw's cause of action (right of appeal) for error of law was finally determined by Sifris J, whose decision was upheld when Mr Shaw's application for leave to appeal was refused by this Court. That decision creates cause of action estoppel. The 'question of law' cause of action cannot be litigated again.
Mr Shaw conceded, quite properly, that if s 111 were applicable, then it operated to prevent him from re-litigating any of 'the issues in dispute' in the application which
he made under the FTA. For the reasons given earlier, Mr Shaw is in fact in no worse position because of his decision to pursue his claim, in the alternative, under the FTA. The common law principles discussed earlier barred further proceedings against Rigby Cooke in any event.**
85 I have had the benefit of reading, in draft form, the reasons of Maxwell P. I agree, for the reasons his Honour gives, that the appeal from the decision staying the Gadens proceeding should be dismissed and the application for leave to appeal from the decision staying the Rigby Cooke proceeding should be refused.
**86 I have had the considerable benefit of reading in draft the judgment of Maxwell P. I agree with the reasons given by the President that the appeal from the decision staying the Gadens proceeding should be dismissed, and that leave to appeal from the decision staying the Rigby Cooke proceeding be refused.
[2] Shaw v Yarranova Pty Ltd [2006] VSC 45.
[3] Shaw v Yarranova Pty Ltd [2006] VSCA 291; (2006) 15 VR 289.
[4] Shaw v Yarranova Pty Ltd (No 2) [2007] VSCA 48.
[5] Shaw v Gadens Lawyers (Legal Practice) [2008] VCAT 2643; Shaw v Rigby Cooke Lawyers (Legal Practice) [2009] VCAT 1604; Shaw v Rigby Cooke Lawyers (Legal Practice) [2010] VCAT 25.
[6] Shaw v Gadens Lawyers (Unreported, County Court of Victoria, Judge Macnamara, 29 March 2012).
[7] Shaw v Gadens Lawyers (Unreported, Supreme Court of Victoria, Court of Appeal, Warren CJ and Mandie AJA, 15 June 2012).
[8] Shaw v Rigby Cooke Lawyers [2013] VCC 427.
[9] Shaw v Gadens Lawyers (Legal Practice) [2008] VCAT 2643.
[10] Shaw v Yarranova [2006] VSC 45.
[11] Shaw v Yarranova Pty Ltd [2006] VSCA 291; (2006) 15 VR 289.
[12] Shaw v Rigby Cooke Lawyers (Legal Practice) [2009] VCAT 319.
[13] Shaw v Rigby Cooke Lawyers (Legal Practice) [2009] VCAT 1604.
[16] [2007] VSCA 158 ('Louis').
[17] Ibid [36]-[37] (emphasis added).
[18] (1950) 81 CLR 447, 466 (citations omitted).
[19] Shaw v Gadens Lawyers (Unreported, County Court of Victoria, Judge Macnamara, 29 March 2012) pp 13-15.
[20] Shaw v Rigby Cooke Lawyers [2013] VCC 427, [37].
[25] [2009] HCA 52; (2009) 239 CLR 446, 455-456.
[26] [1908] HCA 63; (1908) 7 CLR 277, 304.
[27] See Bropho v State of Western Australia [1990] HCA 24; (1990) 171 CLR 1, 18; Coco v The Queen [1994] HCA 15; (1994) 179 CLR 427, 437.
[29] Ibid 526 (citations omitted). The decision of the Full Federal Court was reversed on appeal but no doubt was cast on the statement of principle by Burchett and Ryan JJ: Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 186 CLR 574.
[30] See Achurch v The Queen [2014] HCA 10, [16] ('Achurch').
[31] Blair v Curran [1939] HCA 23; (1939) 62 CLR 464, 532; Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543, 556-7.
[32] Blair v Curran [1939] HCA 23; (1939) 62 CLR 464, 531.
[33] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589.
[34] (1995) 37 NSWLR 320 ('Lambidis').
[36] (1998) 83 FCR 356, 361-362.
[37] [2003] FCA 596, [35].
[38] See also Boles v Esanda Finance Corporation Ltd (1989) 18 NSWLR 666, 671; King v Lintrose Nominees Pty Ltd [2001] VSCA 140; (2001) 4 VR 619, 626 [19].
[39] Lambidis (1995) 37 NSWLR 320, 332.
[42] Achurch [2014] HCA 10, [36].
[46] See Shaw v Rigby Cooke Lawyers [2011] VSC 214, [100]-[121].
(1950) 81 CLR 447
(2009) 239 CLR 446
(1908) 7 CLR 277
(1990) 171 CLR 1
(1994) 179 CLR 427
(1994) 54 FCR 513
(1939) 62 CLR 464
(1996) 40 NSWLR 543
(1995) 37 NSWLR 320
(2001) 4 VR 619
(1996) 186 CLR 574
(1981) 147 CLR 589
(1998) 83 FCR 356
(1989) 18 NSWLR 666
(2006) 15 VR 289