Citation : SMITH & ANOR -v- McCUSKER QC [2003] WASC 150

Practice and procedure - Appeal from grant of summary judgment - Negligence - Legal practitioner - Loss of opportunity to bring action - Unrepresented litigant - Defective pleadings - Turns on own facts

Bank Für Gemeinwirtschaft Aktiengesellschaft v City of London Garages Ltd [1971] 1 WLR 149

Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87

Forsayth NL v Northern Gold NL, unreported; FCt SCt of WA; Library No 940012; 20 January 1994

G W Sinclair & Co Pty Ltd v Cocks [2001] VSCA 47; [2001] ANZ ConvR 522

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351

Kitchen v Royal Air Force Association [1958] 1 WLR 563

Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638

Michael v Nicolson, unreported; FCt SCt of WA; Library No 950660; 1 December 1995

Miles v Bull [1969] 1 QB 258

Smith v McCusker QC [2000] WASCA 320

Smith v McCusker QC [2001] WASCA 85

Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1997) 9 ANZ Ins Cas 61-343

Laferla v Birdon Sands Pty Ltd, unreported; SCt of NT; 21 August 1998

Servcom Australia Pty Ltd v Shenton [2000] WASC 49

1 WHEELER JA: The appellants (the plaintiffs) appeal from a decision of Master Sanderson delivered 14 August 2003 giving summary judgment for the defendant. The matter has an appallingly lengthy history. The transactions out of which all of these issues arise took place in 1977 and in the following years. They concerned certain discussions and borrowings which the plaintiffs had with the Rural & Industries Bank of Western Australia ("the Bank"). In due course, the plaintiffs determined that it would be desirable to take legal action against the Bank in respect of those matters. In 1985, they received a grant of legal aid for an opinion on the merits of that action and the respondent (defendant) delivered an opinion in March 1989. It is the plaintiffs' position that that opinion negligently failed to take certain matters into account and that, as a result, legal aid was eventually terminated, so that, it is said, the plaintiffs lost the chance to bring an action successfully against the Bank.

2 The writ against the defendant was issued in March 1995 and was served in January of 1996. The statement of claim delivered in February of 1996 was struck out and eventually a substituted statement of claim was served. The statement of claim in the form which it took in April of 1997 was also struck out, and judgment given for the defendant. The plaintiffs appealed to the Full Court. There were significant delays in the hearing of that appeal and in the delivery of judgment. Some were attributable to the Court, and some to the plaintiffs. By its decision delivered 30 October 2000, Smith v McCusker QC [2000] WASCA 320 ("the 2000 decision"), the Full Court held that, in certain respects, the proposed substituted statement of claim did disclose a cause of action.

3 The Full Court took the unusual course, which it considered to be necessary in order to deal with the complex pleading attempted by plaintiffs in person, of formulating a list of questions which it answered in respect of different portions of the statement of claim. The manner of answering those questions has presented certain difficulties for the present case, with which I will deal later. It is desirable first, however, to set out in some little detail the factual background out of which the proceeding arises.

4 In March or April of 1977, the plaintiffs saw the manager of the Ongerup branch of the Bank, Mr Danks. At that time, the plaintiffs owned a farming property of 2684 acres, which was partly developed. The development to that date had been financed from share-farming and income from outside work. The plaintiffs had a number of pigs and some items of plant. They had, at that time, a small overdraft liability to the National Bank and a small quantity of outstanding trade debts, but the property itself was free from any encumbrance.

5 In 1977, the plaintiffs wished to crop part of the farm and wished to purchase a heavy-duty tractor for that purpose, in order to clear the property. The National Bank, their existing banker, was prepared only to finance the purchase of a light-duty tractor which would cost a little over half the cost of a heavy-duty tractor. The plaintiffs approached Mr Danks, explaining that they had fallen out with the National Bank because of the refusal to finance a heavy-duty tractor and also because the National Bank was not prepared to extend their overdraft facility to enable them to expand their farming operations.

6 The content of the discussions the plaintiffs had with Mr Danks were something which would have been the subject of oral evidence if the action against the Bank had ever come to trial. Broadly, the plaintiffs say that they had wide-ranging discussions with him, and explained in considerable detail their expansion plans. Those plans included further clearing of the property and an increase in existing pig numbers. They thought that they would require an overdraft of about $30,000 over a number of years to carry out that development.

7 As a result of the meeting, the Bank undertook to provide them with an overdraft of $3000 and a loan facility of $7000 to enable them to pay a deposit on the purchase of the heavy-duty tractor, repayable over three years. It produced a cash flow budget ("the budget"). The budget seems to have been produced largely as a matter of Bank practice, and may have been directed at the ability of the plaintiffs to service the loan. In any event, it has always been alleged by the plaintiffs that the figures in the budget were significantly in error, underestimating costs and overestimating likely income. The plaintiffs also allege that the Bank agreed to provide an overdraft facility, or other finance facility, which would provide sufficient funds to enable them to embark upon and complete their proposed development programme, and to provide advice about their proposals.

8 Initially, the plaintiffs sought advice from a firm of solicitors which briefed Mr Rowland QC. In his first memorandum of advice, he referred to an uncertainty in the evidence produced to him at that time as to precisely what it was that the plaintiffs had sought from the Bank. As will appear later in these reasons, that uncertainty persists today. He said that, "The impression I get from the proof of evidence is that they were seeking money rather than advice on how to farm". He noted that it was not clear who made the assessment, contained in the budget, of the money required to operate the farm, including the amount of land to be cropped, the amount of superphosphate required, and the other items that required carry-on money. If the Bank performed those tasks, understanding that the plaintiffs would rely on it to do so properly, he indicated that there might well be a cause of action in negligence.

9 The focus of the advice from Mr Rowland QC tended to be upon the budget produced by the Bank, and its flaws. That focus was reflected in the statement of claim. It was also a matter upon which the defendant to the present action commented extensively. His conclusion was that the plaintiffs did not rely upon that budget. There were a number of legal opinions produced by other counsel, subsequent to the defendant's opinion. They did not persuade the Legal Aid Commission to continue funding the action. The plaintiffs assert, however, that they were either for limited purposes only, or wrongly accepted the defendant's view of their claim, so that it was the defendant who caused the loss of funding.

10 In its reasons delivered in 2000, the Full Court accepted that the defendant was correct in forming the view that the plaintiffs had not relied upon the budget. However, the Full Court considered that there may have been a somewhat differently framed cause of action which was available against the Bank, and that it was open to the plaintiffs to plead that the defendant had been negligent in failing to consider that basis of a cause of action in his opinion.

11 In the reasons delivered in 2000, the relevant paragraphs in the decision of Templeman J (with whom the Chief Justice and Owen J agreed) are as follows. They refer to what had been par 9.3.15.3 of the statement of claim, the subject of that appeal.

"120 The allegation in this paragraph is that in discussing the Smiths' reliance on the 1977 cash flow budget, on p 19 to p 22 of his opinion, Mr McCusker did not address the issues raised in specific parts of Mrs Smith's proof of evidence, and her proof generally:

'... which tells the story of an inexperienced housewife and an almost illiterate farmer and their struggles to understand the paperwork for such a financial venture, and the necessary reliance they placed on [Mr Danks] both in the procedural and formal stages of the loan arrangements.'

137 The reality, I think, is that the statement of claim did not reflect the Smiths' case, as it appears in the proof of evidence given to Mr McCusker. The Smiths did not rely on the budget; they relied on the Bank to provide a proper budget. They went to the Bank to obtain finance for a development programme which they did not have the expertise to implement unaided. They wanted advice about how they should plan their programme, and they wanted funds to implement it.

138 The Smiths thought the Bank had agreed to give that advice, and the necessary funds, over an extended period. They borrowed money and they then realised the budget was inappropriate. They raised their concerns with Mr Danks and he told them not to worry. They did the best they could, but soon encountered financial difficulties. There is then, of course, a question of the cause of those difficulties. Were they the result of lack of advice from the Bank or of extraneous matters, such as the late delivery of the tractor or poor seasons?

139 Setting that question aside for the present, the fact remains, I think, that on the basis of the material submitted to Mr McCusker there is an argument that, as the Smiths allege in par 9.3.15.3, he failed to address the issues raised in Mrs Smith's proof of evidence. At several places in his opinion he focussed on reliance on the budget, which was not a real issue. He did not address the inconsistency in the statement of claim against the Bank, nor did he advise how it should be amended to reflect the true issue.

140 Although Mr McCusker had not been asked specifically to give general advice, he in fact took it upon himself to do so. In par 2 of his opinion, he said, in substance, that he had undertaken a full review of the issues in the action and the basis of the Smiths' claim. As I have noted above, that was his duty in any event.

141 In my view, therefore, this part of the statement of claim against Mr McCusker does disclose a cause of action in negligence. Whether any loss flowed from the alleged negligence is the subject of Question 3.

...

160 I have come to the conclusion, assuming the facts pleaded in the statement of claim to be true, it alleges that Mr McCusker was negligent in the following respects:

(1) he failed to read or to take into account that part of his brief which disclosed that the Smiths did not rely on the 1977 cash flow budget, but on the Bank to provide proper advice as to the implementation of the Smiths' proposal for the expansion of their farming activities;

(2) he therefore placed undue emphasis in his opinion on the difficulties which the Smiths would face in seeking to prove that they had relied on the budget;

...

162 However, it is then alleged that on 9 April 1994:

'... in reliance upon the errors in the opinion and in view of the projected costs and the diminishing availability of legal aid money the Legal Aid Commission terminated [the Smiths'] grant of legal aid'.

163 That is an allegation of fact, which must be assumed to be true for present purposes. It is submitted by the respondents that the plea does not raise an arguable case on causation and that it 'impermissibly assumes that the opinion should have been favourable' (Submissions, par 12). I do not accept that submission. On the facts pleaded in the statement of claim, it is arguable that the opinion was prepared negligently, to a certain extent. It was unfavourable to the Smiths. It may be assumed that but for the negligence it would have been more favourable. It would not have given the impression that the question of reliance posed an almost insuperable hurdle. It would not have cast doubt on the Smiths' credibility in relation to their initial conversations with Mr Danks and in relation to their apparent failure to tell the RAA about the cause of their problems. It would not have given the impression that Mrs Smith had failed to provide information on which the calculation of damages had been based.

...

167 In all the circumstances, and particularly as it seems the Legal Aid Commission regarded the case as being somewhat borderline, it seems to me to be arguable that if there had not been negligence as alleged, and the opinion had been more favourable, legal aid would not have been terminated. The Smiths therefore arguably lost the opportunity of having their case tried. Consequently, they lost the chance of recovering damages against the R & I Bank. Whether, and to what extent, the loss of that chance meant that they actually suffered financial loss and damage it is not possible to say. Subject to those qualifications, the answer to Question 3 is 'Yes'." (Emphasis supplied throughout**)**

12 In supplementary reasons, Smith v McCusker QC [2001] WASCA 85, delivered 6 April 2001 ("the 2001 decision"), the Full Court repeated, and perhaps clarified [137] and [167] of the 2000 decision, in the following terms:

"11 The Smiths contend that if the respondent had discharged his duty to them, he would not have focussed on the insuperable hurdles in the case as pleaded, but would have identified and explored the true case. This no doubt involved an expectation by the Smiths that the Bank would provide a proper budget. However, on our view of the Smiths' case, that was not the full extent of the Bank's obligation. On their case, the Smiths were relying on the bank for advice and guidance generally: see par 137 of the previous reasons. That being so, the Smiths' pleading did not necessarily require an allegation that their loss was caused by the Bank's failure to provide a proper budget.

12 It is not for the Court to formulate a pleading for the Smiths. However, it may be acknowledged that a failure by the Bank to give general advice and guidance, when relied on to do so, has the potential to found a claim for loss.

13 That is not to say, of course, that if the respondent had considered such a case, he would necessarily have been enthusiastic about it: there may have been other significant causes of loss. The point is, however, that as a result of his alleged negligence, the respondent did not consider this case. Had he done so, then, as stated in the earlier reasons, it is arguable, that the opinion:

' ... would not have given the impression that the question of reliance posed an almost insuperable hurdle. It would not have cast doubt on the Smiths' credibility in relation to their initial conversations with Mr Danks and in relation to their apparent failure to tell the RAA about the cause of their problems. It would not have given the impression that Mrs Smith had failed to provide information on which the calculation of damages had been based.'

Thus, it may be assumed for present purposes that the opinion would have been more favourable. The Smiths are clearly entitled to plead a case on that basis." (Emphasis supplied)

13 It is desirable at this point to consider what it was that the Full Court, in 2000, was asked to deal with, and to contrast that with the task of the Master and this Court in the present appeal.

14 In the 2000 appeal, the plaintiffs had filed a notice of motion for leave to file a proposed amended writ and substituted statement of claim, the previous statement of claim having been struck out. The Master's first task was to consider whether that document was intelligible, in a legal sense, in that it complied with the rules of pleading and was not cast in a way which would embarrass the defendant. In relation to that issue, the Master found that the proposed substituted statement of claim "offends almost all principles of pleading. It is argumentative, it includes matters of evidence and it would undoubtedly delay a fair trial of the action".

15 That decision does not seem to have been the subject of appeal. Certainly, the Full Court, by taking the course it did of asking a variety of questions, seems to have accepted that the proposed substituted statement of claim could not be dealt with as if it were a conventional pleading.

16 The Master then had to determine whether to give the plaintiffs a further opportunity to produce an acceptable pleading, or to allow the matter to proceed without pleadings, or to refuse leave to file the proposed pleading and to enter judgment for the defendant. The Master considered it inappropriate and manifestly unfair to the defendant, to allow the matter to proceed without pleading, and the Full Court does not seem to have disagreed with that course.

17 The Master considered that it would be inappropriate, however, to allow the plaintiffs to file a further statement of claim, because he was of the view that not only was the action unlikely to succeed, but that, even if it did succeed, it would be a very difficult task for the plaintiffs to prove their damages. Before reaching that conclusion, he had read a copy of the opinion written by the defendant and expressed the view that, as he understood the issues, it was difficult to see how the opinion was wrong, and that even if it was, he was unable to see any hope of the plaintiffs establishing that it had been prepared negligently.

18 The Full Court, then, was required in that appeal to consider whether there could be, somewhere in the matters attempted to be pleaded by the plaintiffs, a viable cause of action. In order to consider that question, it considered not only the proposed substituted statement of claim, but also a copy of the opinion in question.

19 It is not clear what other material the Full Court had before it. The learned Master had apparently been provided by the plaintiffs with five volumes of submissions running to over 570 pages, in relation to the question of whether he should enter judgment against them. In the submissions in the present matter, matters of submission and matters which should be the subject of evidence are mixed together, and I have no doubt that that was the case in relation to the submissions made by the plaintiffs before the Master and before the Full Court on the previous occasion. The Full Court would therefore have had at least a general idea of the sorts of matters to which the plaintiffs might wish to refer in evidence, which would have assisted in reaching a view about whether there was in that material something which, although not referred to in the proposed substituted statement of claim at that stage, might found a cause of action.

20 However, on the previous occasion, the Full Court was not concerned with the question of whether the pleading as it then stood, or any other form of pleading, was one which appropriately complied with the rules of pleading so that it would be fair to require the defendant to respond to it. Indeed, in the passage which I have quoted from the supplementary decision, it was expressly noted that it was not for the Court to formulate a pleading for the plaintiffs (for example [12] of the 2001 decision).

21 Importantly, the Court was not concerned with the question of whether there was any evidence upon which the plaintiffs' pleaded cause of action was or could be based. Rather, at a number of points, including some portions of the passages from which I have quoted, the Court noted that it was required at that stage to assume that facts which were pleaded could be established by evidence. Further, at a number of points, because of the deficiencies in the pleading, the Court was required to assume that a fresh pleading would fill a number of gaps which then existed in the plaintiffs' case. The passages italicised above call attention to some of those gaps.

22 Because the plaintiffs were in person, however, the Full Court does seem to have descended at some points into dealing with questions of evidence. Its purpose in doing so seems to have been to ensure that it could eliminate from consideration matters which the plaintiffs wished to plead and which, on the materials before the Full Court at that time, were plainly untenable. It may be that the taking of this course led the plaintiffs to the mistaken view, which it appears they now hold, that anything not ruled out by the 2000 decision must have an evidentiary foundation. I refer to some examples.

23 At [88] and [89] of the 2000 decision, the Court deals with a pleaded allegation that the defendant failed to understand that the plaintiffs had already established a substantial piggery on the property. The view is expressed by the Full Court that it was plain that the defendant was aware of the pre-existing piggery. If one considered the matter strictly, it was not at that time the Full Court's task to go behind the allegation pleaded, but as a matter of practicality there was plainly no point in considering whether the allegation gave rise to any cause of action if the allegation was demonstrably based on a misunderstanding of the opinion, as the Full Court thought it was.

24 Similarly, at [100] to [105] of the 2000 decision, the Full Court deals with an allegation that the defendant's opinion mistakenly asserted that the evidence of what was agreed between the plaintiffs and the Bank was "essentially" the oral evidence of the plaintiffs. The pleading asserted that most of what was agreed between the plaintiffs and the Bank was recorded in various documents. The Full Court, however, noted that the critical element of the alleged agreement between the plaintiffs and the Bank was that which related to a supply of further overdraft facilities from year-to-year, which matter was not referred to in any relevant document, so that the opinion was correct if one understood it to be referring to the critical portion of the agreement. Again, the Full Court has to a limited extent in those paragraphs not been prepared to accept each assertion in the pleading at face value, but has ruled out those portions which clearly rested upon a mistaken understanding of the facts as they were placed before the Full Court.

25 However, it is important to bear in mind, when considering the present case, that the Full Court was concerned centrally with the question of whether there could be discerned from the defective pleadings to that date, some cause of action which "with appropriate amendment and a little assistance from the court, could be put into proper form" (Seaman, Civil Procedure in Western Australia, at par 20.19.1A). It was not concerned to advise the plaintiffs as to the precise form that pleading should take; such a course would have been inappropriate, as the Full Court recognised. Nor was it concerned, save in the very few, very clear instances to which I have referred, with the question of whether such a cause of action had any prospect of being made out upon evidence which either had been obtained or might be able to be obtained by the plaintiffs. A correct understanding of what the Full Court was concerned about in 2000 answers the submission made more than once by Mrs Smith, on behalf of the plaintiffs, to the effect that the Full Court had already ruled that there was a cause of action and that that cause of action could not simply "disappear".

26 It is desirable to briefly consider what it is that the plaintiffs would be required to prove and what it is, by reason of the 2000 decision of the Full Court (and as may be assumed for present purposes), that they could prove. In Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1997) 9 ANZ Ins Cas 61-343, the Full Court considered "loss of a chance" cases, in the context of alleged negligence on the part of an insurance broker. Ipp J in that case (with whom Kennedy and Franklyn JJ agreed) considered solicitors' negligence cases, and summarised the position in terms which are sufficient for present purposes. At 76,755 of that decision, his Honour said:

"Two principal factors are essential to the proof of loss by a plaintiff caused by its solicitor's breach of duty. The first is, proof that, but for the breach of duty, the plaintiff's claim against the wrongdoer had at least some value. The second is proof that, by reason of the solicitor's breach, the claim against the wrongdoer is more difficult to pursue and that such difficulty has caused the plaintiff loss. Differing degrees of certainty may attach to these two factors."

(Dismissing an appeal, the High Court did not treat the case as one of "loss of a chance", but that does not affect the accuracy of the summary: [1998] HCA 38; (1998) 192 CLR 603.)

27 Once there is proof that, but for the breach of duty, the claim had some value and that the claim is more difficult to pursue, the question then becomes simply one of assessment of damages. That is to be done in the manner described in cases such as Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638. As Deane, Gaudron and McHugh JJ said at 643 of that case:

"If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages."

That is, the Court assesses the degree of probability that an event would have occurred, and adjusts its award of damages to reflect the degree of probability.

28 In the present case, consideration of what, as a matter of fact, the plaintiffs would have to prove is complicated by the relevance of the decision-making processes of the Legal Aid Commission to the plaintiffs' case. In a usual case of a legal practitioner's negligence, the practitioner will have advised that there is no claim, and that advice will have been accepted by the client, or the legal practitioner by negligence may have failed to take steps which would be required to comply with the statute of limitations. There is no additional step between the legal practitioner's conduct and the loss of the action.

29 In the present case, the plaintiffs do not assert that they were ever advised, or that they would have accepted advice, that they did not have a cause of action. The advice given by the defendant is alleged only to have caused the Legal Aid Commission to discontinue funding, so that the action could not be pursued with counsel of the plaintiffs' choice in the manner in which the plaintiffs would otherwise have pursued it. It is not alleged to have led to the loss of the action altogether, since it was always open to the plaintiffs to pursue the action in person had they wished, as they pursue the present action.

30 The various matters which would therefore be required to be proved seem to me to be as follows:

(1) It would be necessary to prove that the Bank had agreed to provide, or had represented that it would provide, "proper advice".

(2) It would be necessary to prove that the plaintiffs relied upon the Bank to do so.

(3) It would be necessary to prove that the Bank failed to provide "proper advice".

31 These matters would be "proved" for present purposes if it could be proved that there was evidence which could have resulted in them being made out. It seems to me that all of these matters are to be assumed, for present purposes. My reason for saying that is that it appears to me that the 2000 decision accepted, in favour of the plaintiffs, that such a case could be pursued. It is important to emphasise, in case it should ever become relevant in the future, that the Full Court did not find that the plaintiffs would be successful in such a claim; that would be a matter for evidence and for a trial court in the future. The plaintiffs' prospects of success in relation to these issues were matters about which the Full Court did not express an opinion.

32 The plaintiffs would also have to prove the following:

(4) That a barrister exercising reasonable care and skill would have seen that the plaintiffs' case was one resting upon an absence of "proper advice" (this does not necessarily flow from the first three points, since there must be something in the materials provided to the barrister to raise that issue).

(5) That a barrister exercising reasonable care and skill would therefore not have pleaded or advised concerning a case involving reliance upon the budget.

(6) That the barrister's opinion would therefore have been more favourable to the plaintiffs.

It seems to me that points (4) to (6) must also be considered to be decided in favour of the plaintiffs by reason of the 2000 decision.

33 However, the matter does not end there. The 2000 decision, in essence, determined in favour of the plaintiffs that their case was one relating to "proper advice", that the defendant should have seen that, and that he would have advised more favourably as a result, in the sense that his advice would not have focussed upon a number of factors adverse to the plaintiffs which were associated with a plea of reliance upon the budget. However, the plaintiffs must not only demonstrate that the defendant pleaded the wrong case, and should have pleaded a different case; it is also necessary to demonstrate that if he had advised concerning the different case, there was some prospect, considered in the way I have discussed above, of an outcome favourable to the plaintiffs. That involves these steps:

(7) Proof that the absence of "proper advice" arguably caused the plaintiffs' loss. That would involve an assessment of what "proper advice" would have been, what the plaintiffs would have done faced with that "proper advice", and the financial consequences of that course.

If, having established those factors, it appeared that it was arguable, having regard to what the plaintiffs in fact did, that they would either have avoided loss or gained financially as a result of the giving of "proper advice", then they could be shown to have had a case which would arguably have been successful. It is not necessary, as it seemed to me that the defendant appeared to suggest on occasion, that the plaintiffs actually demonstrate that an absence of "proper advice" caused them loss, in the way in which that matter would have to be demonstrated if they were suing the Bank.

34 In order to demonstrate loss of the chance of an action, it is necessary only to demonstrate that there is an action which would arguably have been successful. As noted above, once there is some prospect of success, it falls to the Court to assess damages having regard to the likelihood of success. That is why I have phrased this step in terms of the plaintiffs demonstrating that the absence of "proper advice" arguably caused them loss:

(8) The plaintiffs would then have to demonstrate that a barrister exercising reasonable care and skill would have advised that there was some prospect of success of such an action.

That would seem to follow if the assessment at step (7) were favourable to the plaintiffs.

35 However, because of the interposition of legal aid, the matter does not end there. It seems to me there is a further step which the plaintiffs would be required to demonstrate, and that is the following:

(9) That the plaintiffs' case, as a barrister exercising reasonable care and skill would have assessed it, was sufficiently strong to make the expenditure of Legal Aid Commission funds in pursuit of that claim worthwhile, and that the quantum of the loss was also sufficient to justify that expenditure.

It may be that this step would flow from step (7) above, because it may be that an assessment of the plaintiffs' case would show it to be very strong, and the loss very great. However, if the plaintiffs' case appeared to be weak at step (7), it may be that it would be necessary for the plaintiffs to prove facts relevant to the Legal Aid Commission's assessment of a claim such as theirs at the relevant time. I do not deal with this issue further in these reasons, and for the present I assume it in favour of the plaintiffs.

36 The issue upon which the defendant focuses, and which was of concern to the Master is step (7).

37 Turning to the question of the issue which was before the Master in the application the subject of this appeal, in an application for summary judgment brought by a defendant, the onus is upon the defendant to demonstrate that there is no serious question to be tried upon any cause of action raised by the plaintiff. However, in attempting to meet that requirement, the defendant need deal only with the plaintiff's case as pleaded. Franklyn J observed, in Forsayth NL v Northern Gold NL, unreported; FCt SCt of WA; Library No 940012; 20 January 1994, at 6 - 7, that it is not for the Court on such an application to identify or accept some other cause of action, not pleaded, which the evidence might arguably support, but which is not relied upon in the statement of claim. Providing the statement of claim is construed broadly and generously, and that any ambiguities are either clarified or assumed in favour of a plaintiff, and provided that no reasonable application to amend is rejected, I accept that proposition.

38 There are many authorities, most ultimately traceable back to the observations of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 130 to that effect, that it is important that the Court take great care and be cautious before granting such an application, and emphasising that a plaintiff should not lightly be deprived of the opportunity for the trial of his or her case by the appointed tribunal. I unreservedly accept that proposition. However, it is worth noting that, in the same case and at the same page, Barwick CJ agreed with an earlier observation of Latham CJ to the effect that a defendant should be saved from the vexation of the continuance of useless and futile proceedings.

39 It is not only the defendant who is protected when the Court puts an end to useless and futile proceedings. A plaintiff in person can waste many years, suffer great stress, and incur costs in the way of travel, photocopying, income foregone and the like, in pursuing proceedings under a mistaken belief that, because a Court has not put an end to them despite having been invited to do so, those proceedings must ultimately have some good or reasonable prospect of success. In the present case, the statement of claim pleads at par 47.9 that both plaintiffs have suffered distress because of their preoccupation and worry with the litigation "instead of being able to do all the normal things any other people would do". While the discretion to grant summary judgment on the application of a defendant should be exercised sparingly then, it is plain that it is in the interests of justice that, where the Court is convinced the test to which I have referred is satisfied, it should order summary judgment.

40 The statement of claim dated 24 February 2003 relevantly provided in par 2 that the plaintiffs in 1977:

" ... went to the Rural & Industries Bank (the Bank) at Ongerup to obtain finance for a development programme which they did not have the expertise to implement unaided. The Rural & Industries Bank was the main development bank for the district, being a Government bank established for the purpose, among other things, of servicing farming and industry. The plaintiffs wanted advice about how they should plan their programme, and they wanted funds to implement it. The manager, Richard Danks, (Danks) agreed to advise and to provide finance to implement the plaintiffs' proposed expansion plans."

"In reliance on the Bank's agreement to provide finance and advice, the plaintiffs in 1977, borrowed money from the Rural & Industries Bank in Ongerup on the security of a mortgage over the farm. They allege that due to the negligent advice and a breach of contract of the Bank they were unable to repay the said borrowings."

"The defendant failed to read or take into account that part of his brief which disclosed that the Smiths did not rely on the 1977 cash flow budget but on the Bank to provide proper advice as to the implementation of the Smiths' proposal for the expansion of their farming activities."

It can be seen that par 22.1 is essentially a transposing into the statement of claim of a portion of the 2000 decision.

43 Paragraph 24 pleads that as a consequence of the defendant's negligence, later counsel and experts and the Legal Aid Commission formed "wrong conclusions" about the basis of the matter, although the wrong conclusions are not identified.

"If there had not been negligence [by the defendant] as described and the opinion had been more favourable and if the negligence of the defendant had not necessitated the incurring of additional costs and the spending of more time to do what the defendant should have done legal aid would not have been terminated, and the plaintiffs' case against the Bank would probably have been heard in a reasonable time."

45 Paragraph 29 pleads rather similarly, to the effect that if the opinion had addressed the true issues and had been more favourable, and had been obtained promptly, there would have been no need for the plaintiffs to do certain things. Paragraph 30 then pleads that the plaintiffs have lost their opportunity to have a trial of their action against the Bank, and as a consequence have lost the damages which they might have recovered in that action.

46 Against the background of the voluminous submissions in this case, and the history of the matter to date, it is clear that the allegation of breach of contract by the Bank is an allegation that the manager had agreed with the plaintiffs to provide them, in effect, with as much funding as they needed to implement their proposed programme. The claim was that, despite that agreement, the Bank only provided much more limited funding, and some of that reluctantly and late, so that the development proposed by the plaintiffs was not able to be carried out properly. That is a claim which was well understood by the defendant and canvassed in detail in his opinion. Such a claim is, as the defendant's opinion points out, inconsistent with all of the documentary evidence and with inferences which could reasonably be drawn from the documentary evidence. To the extent that the Full Court considered this issue in 2000, [100] through to [106] and [111] through to [119] make it clear that the Full Court accepted that there was no basis for criticising the way in which the defendant approached the contractual issue. The present appeal must therefore be approached on the basis that there was no negligence in relation to a claim for a failure to provide funding, in breach of a contract to do so.

47 I should also add that there is an allegation in the claim of February 2003 of loss stemming from the defendant's delay in providing the opinion to the plaintiffs. That, too, reflects views expressed by the Full Court in 2000. It is a claim which appears to be parasitic on the claim that the defendant negligently failed to consider the true nature of the claim against the Bank, in the sense that it is said that the delay in provision of the opinion meant that certain action was taken against the plaintiffs by another financial institution to which they were indebted, which might not have been taken had that institution understood that there was a claim against the Bank which had some prospect of success and which was being pursued. It is therefore an element of the claim relating to the delay in provision of the opinion that the opinion, when provided, should have been more favourable, and that the prompt provision of that favourable opinion would have influenced the other financial institution. That issue can therefore be put aside for the purpose of this appeal, as in practical terms it stands or falls with the claim of negligence in overlooking a viable basis of a claim against the Bank.

48 The evidence before the Master, perhaps unusually, took the form of an affidavit on behalf of the defendant which consisted largely of the materials produced by the plaintiffs in their earlier appeal. However, the thrust of the summary judgment application as developed by the defendant in oral argument was broadly the following. It was submitted that it was critical to the plaintiffs' revised claim to demonstrate what the outcome would have been had the Bank provided to them "proper advice", in part because it was necessary to demonstrate that, had counsel properly considered that matter, a favourable view would have resulted. It was also necessary to demonstrate that the provision and following of "proper advice" would have either avoided loss or would have led to the probability of increased income, because unless that could be demonstrated then there would be no value in the cause of action against the Bank which the plaintiffs alleged they had lost the chance of pursuing. As counsel put it to the Master in argument, "They can't succeed in the new case unless they show that there was another way forward which a bank should have advised them to implement and which they could have successfully implemented ... ".

49 Counsel for the defendant then went through the materials which were dealt with in the defendant's opinion, in order to demonstrate that there was nothing to suggest what "proper advice" would have been, and in order to demonstrate that to the extent that advice different from that originally given by the Bank was later given to the plaintiffs, the plaintiffs failed to follow that advice, and also to demonstrate that, in certain of the materials which were before the defendant, the plaintiffs themselves attributed their loss not to poor advice, but to matters such as drought and the contraction of disease by the pigs.

50 Demonstrating that material showing what "proper advice" might have been was not before the defendant, would not necessarily mean that the plaintiffs' claim was bound to fail. It might be arguable, for example, that if the defendant had understood that the plaintiffs had looked to the Bank for "proper advice", he would have recommended enquiries, which could have produced such materials. In order for the plaintiffs to succeed, however, it would be necessary to demonstrate that there was or could have been found material which arguably demonstrated that advice of a particular kind would have been "proper advice" in the circumstances; that such advice would have been followed by the plaintiffs; and that it would have been likely to avert their loss.

51 In the course of the oral argument of Mrs Smith on behalf of the plaintiffs, the Master asked her on many occasions to identify what advice it was that the Bank should have given, and what evidence, if any, there was to suggest that the plaintiffs would, in fact, have conducted the farming enterprise differently had that "proper advice" been given.

52 The Master rightly considered that the first question was whether leave ought to be given to bring the summary judgment application, the onus being upon the defendant to justify any delay. He acknowledged, in my view accurately, that a defendant wishing to bring an application for summary judgment faces a difficulty when it is clear that there are defects in the statement of claim. He referred, correctly, to Forsayth NL v Northern Gold NL for the proposition that it is not for the Court to identify causes of action which are not pleaded, and noted that it is in the interests of both plaintiff and defendant that a summary judgment application by a defendant is dealt with only when the statement of claim is in proper form. Given the difficulties with the statement of claim in the present case, the Master was satisfied that leave to bring the summary judgment application ought to be granted, there having been no undue delay since the statement of claim was put in acceptable form.

53 The granting of leave was the subject of significant criticism by the plaintiffs. A large number of grounds of appeal dealt with that issue. In my view, they largely reflect a misunderstanding as to the significance of the 2000 decision. They assume that because the Full Court took the view that there was an arguable cause of action available to the plaintiffs, it was not possible for a statement of claim which reflected what the Full Court had said, to be defective.

54 In my view, however, the statement of claim was and still is significantly defective. It fails to identify in any way the "proper advice" which the Bank should have given. It also fails to plead how the failure to give that advice is linked to any loss suffered by the plaintiffs. As I have already noted, the mere finding by the Full Court that there may have been a viable cause of action which would permit the plaintiffs to replead, says nothing about the precise form which that pleading should take. If anything, in the present application the defendant was taking a generous view of the plaintiffs' claim, in attempting to bring an application for summary judgment based on the proposition that, whatever the "proper advice" might have been, there was factually no evidence which the plaintiffs could adduce in relation to causation of loss.

55 Having granted leave to bring the application, the Master then set out relevant portions of the 2000 decision, and portions of the statement of claim which reflected that decision. He endeavoured to summarise the claim made against the defendant, and the submission made about that claim on the summary judgment application. I think it is important to set those summaries out in full. They read as follows:

"11 It is important at this stage to pause and restate just what claim is being made against the defendant. I think the claim can be fairly summarised in this way:

1. At the time the defendant's opinion was sought, the plaintiffs' claim against the bank was pleaded on the basis that the bank had provided to the plaintiffs a cash flow budget which was negligently prepared. The plaintiffs had relied upon that budget and had suffered loss and damage.

2. The defendant, if he had properly read the materials before him, and if he had not otherwise been negligent, would have recommended an amendment to the statement of claim, deleting reference to the plaintiffs' alleged reliance upon the bank's defective cash flow budget and pleading that the bank should have provided to the plaintiffs some advice which, for want of a better description, I will refer to as 'proper advice'.

3. If the defendant had not been negligent, the statement of claim would have been amended, the action would have proceeded, the Legal Aid Commission would not eventually have withdrawn funding and the plaintiffs would have been able to pursue their action against the bank with all the advantages which flow from senior counsel representing their interests.

12 Expressed that way, it will be seen that crucial to the plaintiffs' case against the bank was some evidence to the effect that proper advice from the bank would have led the plaintiffs to adopting some course of action which would not have resulted in them sustaining loss. Accordingly, it is essential for the plaintiffs to establish, as a necessary aspect of their establishing the chain of causation, that there was some evidence to the effect that if the bank had provided proper advice, they would not have proceeded as they did. It is the defendant's case on this summary judgment application that no such evidence exists. In fact, it is suggested that all the evidence is one way - the plaintiffs would not have been dissuaded from their pig-farming activities the way they were. That being so, there is nothing on the evidence which would have justified the defendant recommending an amendment to the pleading and which, as a consequence, would have led to a continuation of the Legal Aid funding."

56 The learned Master accepted that the argument of the defendant in that respect was well-founded. He did so, however, by considering whether there was "some evidence" supporting the plaintiffs' "proper advice" case, rather than, as the defendant submitted, considering whether the plaintiffs could prove what the "proper advice" was, and what its outcome would have been. His approach was correct.

57 On the evidence which was before him, which consisted, so far as I can tell, of essentially the same material which was provided to this Court on the appeal, the Master took the view that there was nothing in that evidence to indicate that, faced with the "proper advice" from the Bank, the plaintiffs "would not have acted as they did". Indeed, it was his view that such evidence as there was, was to the contrary, and he referred in that context to two occasions on which the plaintiffs were advised to alter their farming methods and did not do so. The Master considered that he could not conclude that, given "proper advice", the plaintiffs would not have proceeded precisely as they did.

58 In relation to the submissions of the plaintiffs, the Master said that " ... a party who wishes to take a matter through to trial must, when called upon to do so in a summary judgment application, present some evidence to answer a defendant's case". If that were intended as a statement of the legal onus, it would plainly be incorrect. However, it may be accepted that if a defendant adduces evidence which, prima facie, demonstrates that there is no prospect of the claim succeeding, an evidentiary onus would pass to the plaintiff. That, as I understand it, was the view which the Master took. Looking at the materials to which the plaintiffs referred, then, he expressed the view that there was nothing which would indicate how the plaintiffs would have acted differently if the Bank had provided "proper advice". He went on to say that, "During the course of her submissions, I put this question direction [sic directly] to Mrs Smith who appeared for the plaintiffs. In the end, there was no satisfactory answer: see transcript pages 71 - 75".

59 The grounds of appeal fall essentially into four categories. They are prolix, running to some 50 paragraphs. They tend to fall into the category either of mere assertion, or of submission, rather than identifiable grounds. However, it appears to me that there are broadly four themes. I have already referred to the first, which is to the effect that time should not have been extended. In my view, there is no substance in that.

60 The second group of grounds is that the Master breached the rules of procedural fairness in the way in which he approached the hearing. It is asserted that he allowed the defendant's counsel to argue matters not raised in the written submissions. That is not correct. The submissions are necessarily complex and technical, while the oral submissions deal with one aspect of what is contained in the written submissions in a much fuller way. However, it is not the case that the oral submissions raise new issues.

61 It is also asserted that the Master interrupted Mrs Smith much more than he interrupted counsel for the defendant. That is true. However, the interruptions of Mrs Smith were, it seems to me, directed to attempting to ascertain what it was that she could say in answer to the contentions of the defendant. In my view, it would have been unfair of him not to have attempted to clarify with her what she had to say, or could say, about a critical issue.

62 Under the general heading of natural justice, Mrs Smith asserts that she was misled by the Master saying to her that, " ... if this application was to succeed, it wouldn't succeed on the causation question." She submits that the Master did determine the application on the basis of causation.

63 It is correct that the Master determined the application on the basis of causation, having found that there was no evidence as to how the plaintiffs would have behaved had they been given "proper advice", and as to how that course would have averted whatever loss it was that they alleged. However, that was not the causation question which Mrs Smith was discussing with the Master at the point at which he made that comment. At the time at which that comment was made, Mrs Smith had made submissions, and had been questioned very closely by the Master, in relation to the causation issue which formed the basis of his decision. She had then moved on from that point to another aspect of the submission, which was directed to the question of whether the defendant's negligence (if any) had caused the Legal Aid Commission and other experts to form "wrong conclusions" about the basis of the plaintiffs' claim. It was that causation question to which the Master referred, and that line of submissions to which he effectively put a stop by indicating that it would not be a matter of significance in his decision. It was not a matter of significance in his decision, the Master having placed no weight upon that issue and having not purported to determine it. There is, therefore, no substance in this area of the plaintiffs' submissions.

64 A considerable number of grounds falling under this head appear to deal with the way in which the Court has managed the case. The plaintiffs are attempting to bring an extremely complex claim without legal representation. They are convinced that some action on the part of the Bank, or perhaps some inaction, is the cause of their present very straitened financial circumstances, and they are convinced that they had a cause of action against the Bank which the defendant failed to understand and articulate. However, although they are entitled to whatever assistance and consideration the Court can give, that assistance and consideration falls short of giving legal advice. The decision of the Full Court in 2000 went very close to providing such legal advice, in the sense that it involved canvassing large numbers of documents produced by the plaintiffs and explaining, in a way not clearly reflected in the then proposed statement of claim, how a cause of action might arise against the defendant. In the end, however, it is for the plaintiffs to say what it is that they say the Bank should have done, what they then would have done themselves, and how those different actions would have averted the loss which they maintain they have suffered. It is because there is a possibility that a litigant in person may have a case which he or she is unable to properly articulate that many indulgences are extended to litigants in person. However, in the end, as with any other litigant, the view has to be taken that if a litigant does not point to evidence which could lead to a claim succeeding, that is because there is no such evidence.

65 The fourth category of grounds asserts that the Master erred in concluding that there was no evidence that if the Bank had given "proper advice", the plaintiffs would not have acted in the manner in which they did, and erred in finding that such evidence as there was, was to the contrary. In part, these grounds complain that the Master did not take account of the fact that the statement of claim against the Bank contained a claim of breach of contract. However, as I have noted, the contractual claim was considered by the defendant in a manner which is not, and in my view cannot be, the subject of plausible criticism.

66 The plaintiffs say, quite reasonably, that, since they went to the Bank for advice, they would have followed the "proper advice" if they had been given it, so that the Master should have assumed that they would have acted in some way differently. However, the question upon which the Master focussed was how the plaintiffs would have acted had they been given "proper advice". It is not enough in that context to say, "We would have followed the advice". That does not indicate in any way what the plaintiffs would have done. The question to which the Master was seeking an answer was that of what advice, which the plaintiffs say the Bank should have given, they would have followed and what different result, following that advice, would it have achieved. That is the critical causation question in the plaintiffs' claim.

67 In my view, the Master was correct in reaching the conclusion that there was nothing in either the materials to which the defendant's counsel had directed him, or in any material pointed to by Mrs Smith, which indicated some different course of action which the plaintiffs should have been advised to take and would have taken. This issue does, however, overlap with the third of the group of grounds of appeal, which group raises, in my view, the most difficult issue.

68 The third set of grounds, in effect, complains that the Master did not understand the statement of claim. It is submitted, correctly, that in a summary judgment application, it is necessary that the cause of action pleaded be clear, so that the person bringing the application can show by affidavit evidence that there is no question of law or fact to be tried. In effect, the plaintiffs seek to rely upon the fact that their claim is in certain respects unintelligible, in order to demonstrate that the Master could not have granted summary judgment. Because he did not know what they were claiming, it is argued, how could he have known that there was no evidence to support that claim.

69 The submission that the Master was wrong in giving summary judgment on an unclear statement of claim perhaps emerges most plainly from the submissions which the plaintiffs made to the Master subsequent to the delivery of his reasons. It reads, in par 13 of the notice of appeal:

"What does 'would not have proceeded as they did' mean? This is very vague and when it is the entire reason for entering judgment against us the reasons are not clear enough to be just. Does the Master mean there must be evidence that if the Bank had provided proper advice we:

1. Would not have proceeded with the loan.

2. Would have left farming.

3. Would have farmed sheep.

4. Would not have farmed pigs.

5. Any other thing?"

This question seems to me to be the one which the Master was attempting to have answered during the course of some of his exchanges with Mrs Smith. That is, he was trying to ascertain what it was that the Bank should have advised and what course, consistent with that advice, the Smiths would have taken.

70 It is, of course, for the plaintiffs to identify what the Bank should have advised them. However, there appear, from the voluminous submissions and evidence in the matter, to be only a limited number of possibilities. They are as follows:

1. The plaintiffs should have been advised that they should not farm their land.

2. The plaintiffs should have been advised that they should not borrow $7000, or any other sum.

3. The plaintiffs should have been advised to farm differently - to farm sheep or to grow a different crop, for example.

4. The plaintiffs should have been advised that they needed to borrow more than the Bank was prepared to lend (which could have led to a number of different possible courses, including the outcomes 1 or 2 above, or 5 below).

5. The plaintiffs should have been advised that they should approach some other financial institutions, and advised which institutions to approach and how to go about it.

71 It seems to me what the Master attempted to do was to canvass all of these possibilities with Mrs Smith, and that, having done so, he reached the view that on the evidence none of those were courses which would have led the plaintiffs to behave in any way differently from the way in which they in fact behaved (or at the least, that there was no evidence which would suggest to a barrister in the defendant's position, if he either had the evidence or had made enquiries which resulted in the evidence being available, that this was a claim worth pursuing). Given the lengthy delays in this matter to date, and the obvious difficulties which the plaintiffs have always had in formulating their claim, that seems to me to have been an appropriate course to take.

72 Taking all these possibilities in turn, my conclusions on them are as follows.

Before the Master, during the course of the argument, Mrs Smith expressly stated that she did not believe that the Bank should have advised that she and her husband give up farming. She made a similar comment during the course of argument before us. It can therefore be assumed that it is not the plaintiffs' case that this was the advice which should have been given.

At 473 - 476 of the appeal book, there appears a portion of a memorandum from Mrs Smith to the defendant, which is relevant to this issue. It consists largely of musings upon what the correct advice from the Bank might have been. It includes the following at 474:

" ... it may be that he should simply have declined our application on the ground that the amount of money the bank could make available ... would not generate sufficient income to repay the loans envisaged. After all, that was the truth."

"If we had been able to see what our real position was in terms of what banks will lend, we may have decided not to borrow at all ... ."

These propositions are not consistent with the damages which the plaintiffs sought which, as the defendant noted, assumed that a development programme, requiring significant finance, would have been carried out and would have been successful, but for the negligence of the Bank. However, it is not necessary to explore this apparent inconsistency, since before the Master and before us, Mrs Smith appeared to be firmly of the view that the problem which the plaintiffs faced was, if anything, insufficient funds. The question of whether advice not to borrow should have been given was the subject of perhaps the clearest concession by Mrs Smith during the course of the argument before us. It was, in some ways, a puzzling concession.

73 Having referred to Master Sanderson's finding that there was nothing in the material which would indicate how the plaintiffs would have acted differently if the Bank had provided "proper advice", Mrs Smith said the following:

"I suppose I should bring up now that we wouldn't have acted differently. We would have gone on with the loan exactly the way that we did, but the evidence was before him that that question was asked and there was ... " (transcript page 89)

At this point, I interrupted Mrs Smith, saying, "Sorry I must have misheard you. You said just a minute ago, I think, that you would not have acted differently." Mrs Smith replied:

"We would have gone on with the loan. I mean that, you know. That was the whole point of going to the bank. We went to the bank to get a loan."

"That's the only sense in which I mean that. There are details in which we would have acted differently. Obviously we wouldn't have accepted the loan if we had known that the budget was going to be no good, but the purpose of going to the bank was to get financial advice and a loan. As I said, we went ahead with it believing we had got the correct financial advice and the correct loan. If we had got the correct advice and the correct loan, we still would have gone ahead with it."

Whatever that passage means, it seems clear enough that Mrs Smith was not saying that the Bank should not have advised the plaintiffs not to borrow the money.

This, too, seems to have been a claim which was not part of the plaintiffs' case. There was, of course, evidence, as the Master noted during the course of his reasons, that on those occasions when the plaintiffs were advised to farm differently (for example, by farming sheep), they did not take that advice. Mrs Smith has explained to us why that was so, and we are not in a position to know whether her assessment is correct. However, this, too, seems to have been a head of "proper advice" expressly abandoned by Mrs Smith before us. Having been taken to a variety of documents, I put the following proposition to Mrs Smith:

"So your claim is that the bank should have given proper advice; proper advice was that your development programme was the only reasonable course of action and they should have funded it?" (transcript page 94)

Mrs Smith answered, "Yes". In order to ensure that I had understood that, I again put to Mrs Smith:

"In relation to that can I just - so that the development programme, as alleged - that is the programme that you wanted to implement in the first place. Is that right?"

Mrs Smith answered, "That we went to the bank to get, yes."

74 That is, it seems, plain that the plaintiffs' assertion is that they always knew how to farm appropriately and what was an appropriate development programme for their land, but they went to the Bank for advice of some kind, and for funding in relation to that programme. That is consistent with Mrs Smith's observations to the defendant many years ago (at AB 474) that, "we knew what the farming side involved".

This proposition, too, seems to have been expressly abandoned, in an exchange immediately following the one I have quoted above. Following on from Mrs Smith's reply about the development programme, I put to her:

"All right, and it seems at 339 [of the appeal book] that it is a component of that, that you needed more money than the bank was prepared to lend you for that development programme. Is that right?"

Mrs Smith replied, "No, I don't think so." Roberts-Smith JA then put to her, "It turned out that way, didn't it?" However, she did not agree with this proposition either, saying:

"Well, I don't think it can be simply said that it turned out that way because there were different impacts on what the bank was prepared to lend us due to the fact that because the budget wasn't proper from the beginning we ended up in debt and then the bank of course wasn't prepared to lend us any more."

75 While this last answer is a little difficult to follow, it seems that Mrs Smith was not prepared to accept that it was necessarily the case that the plaintiffs needed more money than the initial loan which the Bank was prepared to extend them. That therefore cannot be part of the plaintiffs' case. In relation to the emphasis upon the budget in the last answer, I should note that the budget referred to is the budget upon which the defendant concluded that the plaintiffs had placed no reliance, and that the defendant before the Full Court in the previous appeal had agreed that they had placed no reliance on that budget. The whole point of their previous appeal, as I have noted, was that the defendant's emphasis upon the budget as part of their case was misplaced. The suggestion that the plaintiffs ended up in debt "because the budget wasn't proper" has brought us full circle, back to the claim initially considered and rejected by the defendant, which claim the Full Court in 2000 accepted was not an appropriate basis for an action.

5. The plaintiffs should have been advised to approach other financial institutions, and advised as to how to approach them.

The problem with this formulation of the advice, is that, as I have already noted, Mrs Smith appeared to reject the proposition that it was necessarily the case that the plaintiffs needed more funds than the Bank was prepared to advance. In any event, as Mrs Smith pointed out at page 99 of the transcript, the plaintiffs did, in due course, borrow other amounts, some of them from other sources. They took out a personal loan to install electricity, a hire-purchase agreement to buy a truck, and borrowed money from a stock firm to buy grain and pigs. At a later stage, although they were deeply in debt by then, another financial institution gave them substantial finance.

76 There were portions of Mrs Smith's argument before us which tended to suggest that it would have been appropriate for the Bank to provide advice as to how to borrow larger sums, and to spread their borrowings. That suggestion also appears in her memorandum to the defendant, at 476 of the appeal book. However, she was not able to point, in argument, to anything in the materials before us, which suggests either that obtaining any particular amount of finance from any particular source at any particular time would have averted the loss which the plaintiffs allege they suffered; or (except to the extent indicated by the fact that other loans were, in due course, obtained) that funds of any amount from any source would have been available to the plaintiffs at the time at which they initially approached the Bank.

77 Finally, I should note that Mrs Smith did not appear to understand the difference between the question of what the Bank should have advised the plaintiffs to do, and the way in which damages might be assessed. On a number of occasions, when asked about either what "proper advice" should have been given, or what different steps the plaintiffs would have taken had they been properly advised, she sought to take us to a variety of documents which calculated how a programme developing the farm in a particular way and ending up with particular numbers of pigs, given particular assumptions of income and expenditure, would have generated very significant profits. She was, however, unable to demonstrate any link between that rosy picture of what would have been achieved had they been able to develop the farm to the point to which they sought to develop it, and any step which the Bank could or should have taken or advised them to have taken. I should note also that those calculations appear to make no allowance for factors such as drought or disease in the pigs, which are contingencies which one could reasonably expect in farming life and which in fact occurred in the present case. As the defendant observed many years ago, it is not possible to demonstrate that it was a failure on the part of the Bank, rather than the occurrence of some of the foreseeable vicissitudes of farming, which put the plaintiffs into the very difficult position which ultimately resulted.

78 So far as it goes, for the reasons which I have outlined above, I am of the view that the Master's conclusion was correct. However, in the peculiar circumstances of this case, it does not necessarily follow that the appeal should be dismissed. Although, in my view, the plaintiffs were not denied natural justice in the way complained of, it must be remembered that they were unrepresented, and that the issues involved in this action are complex.

79 In somewhat similar circumstances, the Full Court on an earlier occasion has taken a particular approach to the granting of summary judgment in relation to unrepresented plaintiffs. In Michael v Nicolson, unreported; FCt SCt of WA; Library No 950660; 1 December 1995, Pidgeon J made some observations (at 10) upon which the present plaintiffs rely. In that case, too, there was a factual question as to whether there was any evidence to support the facts pleaded. In Michael v Nicolson, the Master worked on the basis that, as there was no affidavit filed, there was no such evidence. Pidgeon J, however, observed:

"I consider in the circumstances of this case, the matter could not be decided until the appellants, as plaintiffs, had an opportunity, of which they were fully conscious, to lead evidence on that particular point. They were given an opportunity to file an affidavit but they would not have realised the critical facts to which they were required to depose." (Emphasis supplied)

80 Those observations are, in my view, applicable with appropriate modification in the circumstances of the present case. That is particularly so, since the plaintiffs have, perhaps understandably, appeared to assume, in effect, that the 2000 decision determined in their favour all questions which were capable of being raised concerning the question of whether they had an action which it was open to them to pursue.

81 I would therefore, in the particular circumstances of this case, allow the appeal, and set aside the decision of the learned Master.

82 I would, however, require the plaintiffs to amend their statement of claim to plead in respect of these issues:

(a) what advice the Bank should have given the plaintiffs;

(b) what course of action the plaintiffs would have adopted, if so advised; and

(c) what loss therefore flowed to the plaintiffs, from the failure to give the advice identified.

83 If they wish, I would grant them leave also to plead material facts concerning any policies or practices of the Legal Aid Commission which may be relevant.

84 I would also grant the plaintiffs leave to file any affidavits necessary to demonstrate:

(a) that the defendant either had available to him, or could have had available (as a result of enquiries which he should have made), material indicating that the advice pleaded would have been the appropriate advice; and

(b) that there was, or could have been found, admissible evidence of such "proper advice".

85 I would hear the parties concerning a timetable for these matters. I would then remit the application to the Master. These orders are not, of course, intended to prejudice any right the defendant may have to object to the amended pleading.

86 Finally, I would repeat two observations already made in these reasons. It does not follow, from the fact that the appeal is allowed, that it is my view that the plaintiffs' claim may or will ultimately be successful. Indeed, on the material presently available to me, I do not think it will. Further, although I acknowledge that the task is a difficult one for plaintiffs in person, it is essential, as a matter of fairness to the defendant, that their pleading identify with some precision the basis of their claim. If they are not able to do so, they must expect that the claim will not be permitted to proceed.

87 ROBERTS-SMITH JA: I have had the benefit of reading in draft the reasons for judgment of Wheeler and McLure JJA. I agree that the appeal should be allowed for the reasons given by McLure JA.

88 As the High Court pointed out in Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 (at 99), power to order summary judgments should be exercised with great care, and never unless it is clear there is no real question to be tried. To succeed on this application the respondent had to show there was no triable issue (of either fact or law) to be investigated. I agree with McLure JA that the decision of the Full Court in the 2000 appeal effectively precludes this Court now holding that there is no triable issue of causation or loss, pleaded in the way described by her Honour. Even where a party appears entitled to summary judgment, the Court has a discretion (Miles v Bull [1969] 1 QB 258, Bank Für Gemeinwirtschaft Aktiengesellschaft v City of London Garages Ltd [1971] 1 WLR 149), and here, even were this Court not strictly so precluded, where the appellants relied upon a not unreasonable construction of the reasons of the Full Court, and having regard to the real nature of the case they wish

to put, the Master ought not to have exercised his discretion to order summary judgment against them.

89 MCLURE JA: I have had the advantage of reading in draft form the reasons to be published by Wheeler JA. I agree that the appeal should be allowed but for different reasons. I am not persuaded that the grant of summary judgment on the respondent's application was open following the decisions of the Full Court in Smith v McCusker QC [2000] WASCA 320 ("the 2000 appeal") and Smith v McCusker QC [2001] WASCA 85 ("the supplementary decision").

90 The background to the 2000 appeal is as follows. The appellants, who are not legally represented, had made a number of unsuccessful attempts to formulate a statement of claim. In April 1997 they applied for leave to file a proposed substituted statement of claim. The application was heard by Master Sanderson. He refused leave and foreshadowed that he was minded to enter judgment for the respondent. The appellants were permitted to file further material going to that question. They filed five volumes containing evidence and submissions. The Master concluded that the appellants' action was unlikely to succeed but even if it did, it would be very difficult for the appellants to prove their damages. Accordingly, he dismissed the action and entered judgment for the respondent.

91 The evidence before the Master was also before the Full Court hearing the 2000 appeal. It included a lengthy and detailed proof of evidence from Mrs Smith. The Full Court concluded that elements of the proposed substituted statement of claim were arguable and granted leave to file a statement of claim limited to specified paragraphs of the proposed substituted statement of claim and such other paragraphs as were necessary to give them context. In considering whether the claims were arguable, the Full Court had regard to, inter alia, Mrs Smith's proof of evidence.

92 The appellants filed a statement of claim which draws heavily on the Full Court's reasons for decision in the 2000 appeal. The respondent filed a defence to that statement of claim and applied for summary judgment. In doing so, it relied primarily on the appellants' material which was before the Full Court for the purposes of the 2000 appeal.

93 The respondent's contention before the Master and this Court is that nowhere in the material relied on by the appellants is there evidence that

the negligent conduct alleged against the respondent caused any relevant loss.

94 The Full Court in the 2000 appeal and supplementary decision addressed the question of causation in the context of the proposed substituted statement of claim.

95 Before considering the Full Court's approach, it is necessary to provide further background. In 1979 the appellants were granted legal aid to prosecute an action against the Rural & Industries Bank of Western Australia ("the Bank"). Mr Rowland QC, as he then was, settled the statement of claim in the action which commenced in August 1982. The appellants' pleaded claim was, inter alia, that the Bank agreed to provide a loan facility of $7000 to enable them to purchase a heavy duty tractor and to provide an overdraft facility to enable them to embark upon and complete their proposed expansion and development programme ("the finance agreement"). There was also a plea that the Bank negligently prepared a cash flow budget on which the appellants relied in entering into the finance agreement and expanding their farming operations. The respondent considered both claims in his written opinion the subject of the negligence claim against him. No complaint is made of his analysis concerning the merits of the contract claim. The focus is on the claim relating to the cash flow budget. The respondent confined his consideration to the merits of the pleaded claims against the Bank. He was negative about the prospects for success of the cash flow budget claim, in particular, about being able to establish that the appellants relied on the cash flow budget in entering into the finance agreement.

96 The Full Court concluded that the respondent was arguably negligent in focusing on the pleaded claims rather than identifying the "real case" as it emerged from Mrs Smith's proof of evidence. Templeman J, with whom Malcolm CJ and Owen J agreed, said (at [137]):

"The reality, I think, is that the statement of claim did not reflect the Smiths' case, as it appears in the proof of evidence given to Mr McCusker. The Smiths did not rely on the budget; they relied on the Bank to provide a proper budget. They went to the Bank to obtain finance for a development programme which they did not have the expertise to implement unaided. They wanted advice about how they should plan their programme, and they wanted funds to implement it.

The Smiths thought the Bank had agreed to give that advice, and the necessary funds, over an extended period. They borrowed money and they then realised the budget was inappropriate. They raised their concerns with Mr Danks and he told them not to worry. They did the best they could, but soon encountered financial difficulties."

97 There was material in Mrs Smith's proof of evidence that the cash flow budget unreasonably underestimated costs and overestimated income to such an extent as to cast doubt on the financial viability of the proposed development programme. This Court's identification of the real case should be considered in the light of its earlier statement (at [92]) which is sourced from Mrs Smith's proof of evidence that "the Smiths did not just want a loan. They also wanted advice about the viability of their proposed operations, in respect of which they sought finance. They did not want to borrow money on a basis which would result in their becoming hopelessly indebted to the Bank".

98 The Full Court then went on to consider whether any loss flowed from the alleged negligence. In doing so, the Court confined its consideration to the question whether the alleged negligence caused the appellants to suffer loss by causing the Legal Aid Commission to terminate the grant of legal aid in reliance on the opinion, so that they lost the opportunity of having a trial of their action against the Bank. The appellants pleaded that the errors in the opinion contributed to the termination of the grant of legal aid. After referring to the pleading, the Court said (at [163]):

"That is an allegation of fact, which must be assumed to be true for present purposes. It is submitted by the respondents that the plea does not raise an arguable case on causation and that it 'impermissibly assumes that the opinion should have been favourable'... . I do not accept that submission. On the facts pleaded in the statement of claim, it is arguable that the opinion was prepared negligently, to a certain extent. It was unfavourable to the Smiths. It may be assumed that but for the negligence it would have been more favourable. It would not have given the impression that the question of reliance posed an almost insuperable hurdle. It would not have cast doubt on the Smiths' credibility in relation to their initial conversations with Mr Danks ..."

99 It is apparent from this paragraph that the Full Court was considering the question whether the alleged negligence caused or contributed to the termination of their legal aid. In answering that question in the affirmative, it is also clear that the Court was relying on inferences that arise from the breach identified by the Court based on its reading of the proof of evidence rather than the mere assertion in the pleading. If the respondent had focused on what the Full Court had identified as the arguable case as it appeared in Mrs Smith's proof of evidence, his negative views on the pleaded claim would (at least) have been counter-balanced thereby rendering the opinion more favourable. Templeman J continued (at [167]):

"In all the circumstances, and particularly as it seems the Legal Aid Commission regarded the case as being somewhat borderline, it seems to me to be arguable that if there had not been negligence as alleged, and the opinion had been more favourable, legal aid would not have been terminated. The Smiths therefore arguably lost the opportunity of having their case tried. Consequently, they lost the chance of recovering damages against the R & I Bank. Whether, and to what extent, the loss of that chance meant that they actually suffered financial loss and damage it is not possible to say."

100 After the delivery of the decision in the 2000 appeal, the respondent moved to set aside certain orders on the ground, inter alia, that he was not given the opportunity to be heard on the question of causation. The Full Court rejected the proposition that the respondent was not given an opportunity to be heard in relation to that matter and also rejected his submission on its merits essentially for the reasons given in the earlier judgment.

101 I infer from the Full Court's reasons that it rejected the respondent's submission (also put to this Court) that the appellants had to plead and prove that if he had not acted negligently, he would have produced an opinion that the appellants' case against the Bank had good prospects of success. There are two points to make about that submission. Firstly, it was rejected by the Full Court in the 2000 appeal who focussed on the loss of a chance to receive legal aid funding (and thus legal representation) for the determination of the dispute at trial or, I interpolate, by earlier settlement. The correctness of this approach must, for the purposes of the summary judgment application, be accepted. On that basis, this appeal should succeed.

102 Even if the correct focus is on the prospects of success against the Bank at trial, a plaintiff can succeed if it has suffered some loss of right of some value: see Kitchen v Royal Air Force Association [1958] 1 WLR 563 at 575, approved in Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351 at 363. A loss of a chance is compensable even if its realisation is unlikely on the balance of probabilities. Unless the chance is so low as to be regarded as speculative or so high as to be practically certain, the Court will take that chance into account in assessing the damages: Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643.

103 However, I will assume without deciding, that the appellants in their case against the Bank would have the onus of proving on the balance of probabilities, what they would have done if the Bank had acted without negligence: see _G W Sinclair & Co Pty Ltd v Cock_s [2001] VSCA 47; [2001] ANZ ConvR 522. The answer to the question depends upon identifying what the substance of the Bank's advice and guidance ought to have been. That is a vital intermediate step which needs to be answered before Mrs Smith should be asked to volunteer what the appellants would or would not have done if the Bank had not been negligent.

104 This points up the disadvantage of litigants acting in person. If the respondent had identified what the Full Court said was arguably the real case, the consequential issues would have been pursued by the appellants' legal advisers, including obtaining expert advice as to the substance of the advice that ought to have been given and only then would it be meaningful to enquire what the appellants would have done if that advice was given. It may be the appellants would have ignored such advice. However, that is a matter for trial.

105 I do not accept the respondent's submission that the appellants' written material before the Court mandated a conclusion that their case is that "proper" advice from the Bank would have resulted in the provision of finance to develop the farm. I infer from [92] of the reasons in the 2000 appeal that neither did the Full Court.

106 However, the parties are now in the situation where it is apparent from Mrs Smith's oral responses to questions from the Bench that the appellants have not thought through or clearly identified what they say is the advice and guidance that the Bank should have given and how it would have affected their conduct. Fairness requires that the appellants be required to provide that information. I agree with Wheeler JA that the appellants should be ordered to amend the statement of claim in the way she proposes.

107 For these reasons I would allow the appeal, set aside the orders of Master Sanderson and order the appellants to amend their statement of claim in the way referred to by Wheeler JA.

• Initial dealings with the Bank
• The legal opinions
• The 2000 decision
• The issue in the 2000 decision
• Issue in the present appeal
• The pleading which was before the Master
• The hearing before the Master
• The grant of leave
• The Master's reasons
• The grounds of appeal
• Procedural fairness
• Alleged factual error
• Lack of clarity in the claim
• "Proper advice" generally
• Conclusion