Spralja v Bullard & Ors

(ii) Given the entitlement of the defendants to the claimed immunity, the plaintiff's proceeding has no real prospect of success and should be dismissed at this time.

2 The plaintiff's claims against the defendants are set out in his Statement of Claim dated 13 February 2014, which asserts that:

• proceedings were commenced against him by Peter Kelly ('the Kelly proceeding') on 17 August 2007. In that proceeding Kelly alleged that the plaintiff had breached a sale agreement which he had entered into with Kelly;
• the plaintiff retained the first defendant (who practices as a solicitor) to act on his behalf "in relation to all aspects of advice, investigation and to defend the claim made against him" in the Kelly proceeding;
• the plaintiff retained the second and third defendants (who practice as barristers) "to advise and represent the plaintiff in defending" the Kelly proceeding;
• Kelly eventually made an offer to the plaintiff to settle the proceeding;
• the plaintiff was advised by the defendants that he could not refuse the offer made to him in settlement of the Kelly proceeding and that:

"The Court proceedings were finished and that the plaintiff could not go to trial;"[1]

• the plaintiff was forced by the defendants to sign terms of settlement in the Kelly proceeding and that the defendants represented to him that:

"He had no other option but to sign the terms of settlement on that day;"[2]

• at the time of the settlement, the plaintiff was unable to give proper instructions or understand legal advice by reason of his physical and emotional condition;[3]
• the terms of settlement failed to provide him with fair and reasonable compensation;
• each of the defendants negotiated the settlement notwithstanding the plaintiff's instructions that he was not prepared to accept the offer made by Kelly;[4]
• each of the defendants breached their duty of care to the plaintiff, in that they failed to satisfy themselves that the plaintiff had the capacity to provide instructions and comprehend advice in circumstances in which they knew or ought to have known that the plaintiff lacked such mental capacity;[5]

• the settlement was founded upon inappropriate advice provided by each of the defendants that he should accept the settlement.

(i) the first defendant was retained by the plaintiff to act as his solicitor with respect to the Kelly proceeding;

(ii) the second and third defendants were retained by the plaintiff to act as his barristers in the Kelly proceeding, the trial date for which had been fixed for 18 February 2008;

(iii) on 15 February 2008, an application was made by the first defendant on behalf of the plaintiff to have the trial date adjourned;

(iv) the application was based on the grounds that the first defendant was not in a position to properly represent the plaintiff given that he had been retained by the plaintiff to take over the management of the plaintiff's defence of the Kelly proceeding only three days earlier by reason of a conflict of interest which had arisen between the plaintiff and his previous solicitors;

(v) on 15 February 2008, his Honour Judge Anderson made Orders requiring the plaintiff's previous solicitors to file affidavits as to the timing of and nature of the conflict of interest which had arisen, and adjourned the further hearing of the application to the trial date, namely 18 February 2008;

(vi) on 18 February 2008, his Honour acceded to the plaintiff's application to adjourn the trial and refixed the matter for trial;

(vii) following the adjournment during the afternoon of 18 February 2008, the Kelly proceeding settled (the settlement) and terms of settlement were subsequently signed by both Kelly and the plaintiff (the terms of settlement);

(viii) on 12 June 2008, His Honour Judge Anderson entered judgment in the Kelly proceeding in the form annexed to this Ruling (the Kelly judgment);

(ix) the Kelly judgment was entered as the result of an application by Kelly to enforce the terms of settlement;

(x) The Court file as to the Kelly judgment records:

▪ that Mr Spralja was represented by Mr Mark Settle of Counsel;

▪ that Mr Kelly was represented by Mr Michael Gronow of Counsel;

▪ that judgment was obtained at a trial before his Honour without jury, commencing on 12 June 2008;

▪ that a declaration was made that the terms of settlement dated 19 February 2008 were valid and were enforceable.

The application for summary dismissal in this instance

4 The defendants' application is made pursuant to s62 and s63 of the Civil Procedure Act 2010 (the Act) which provide:

"62 Defendant may apply for summary judgment in Proceeding

A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success.

1. 63 Summary judgment if no real prospect of success

(1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.

(2) A court may give summary judgment in any civil proceeding under subsection (1) -

(a) ...

(b) on the application of a defendant in a civil proceeding;

(c) ... ."

5 In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[6] the Court of Appeal made the following statement as to the approach which should be taken as to an application under s63 of the Act:

1. a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success;
2. b) the test is to be applied by reference to its own language and without paraphrase or comparison with the 'hopeless' or 'bound to fail test' essayed in General Steel;

1. c) it should be understood, however, that the test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

1. d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence."

6 The defendants' application is based on their assertion that the plaintiff's claim is barred by reason of the application of the doctrine of advocate's immunity, which in turn is based upon the well-established principle that a legal practitioner cannot be sued in negligence for what might in summary form be referred to as negligence by a legal practitioner with respect to work done "in court" or "work done out of court which leads to a decision affecting the conduct of a case in court".[7]

7 It is clear that if the defendants' argument is made out, the doctrine of advocate's immunity would provide the defendants with immunity from the plaintiff's claim.

8 In these circumstances I am satisfied that it is appropriate that I rule upon the defendants' application under s62 of the Civil Procedure Act and, in doing so exercise the power conferred upon me by s63 of the Act to give summary judgment if I am satisfied that the plaintiff's case has no real prospect of success.

9 In undertaking that task, I do so adopting the approach to the analysis involved as set out by the Court of Appeal in Lysaght[8] to which I have previously referred.

Findings as to the nature of the legal work performed by each of the Defendants

10 I am satisfied, having regard to the affidavit of David Ernest Bullard sworn 16 July 2015 and the affidavit of Glenn William Casement sworn 17 July 2015, that the retainer of each of the defendants in this instance involved no aspect of work other than the management of the plaintiff's defence in the course of the conduct of the trial in the Kelly proceeding.

(i) Firstly on the basis of the pleadings by the plaintiff in this instance; and

(ii) Secondly, accepting the evidence of Mr Bullard and Mr Casement as set out in their affidavits as to the nature of their retainers in respect of which no real issue is taken by the plaintiff.

12 Whilst no affidavit has been filed on behalf of the third defendant in this instance, I am satisfied:

• that the failure by the third defendant to file an affidavit is accounted for by his incapacity arising out of the illness from which he suffers; and

• that the description by the second defendant as to the circumstances in which the third defendant was retained as counsel justifies the finding which I have made as to the nature of the retainer of the third defendant in this instance.

The Defendants' position as to the relevance and effect of the Kelly judgment

13 In making their application in this instance, the position put on behalf of the defendants as to the relevance and effect of the Kelly judgment is that:

• the Kelly judgment upheld the validity and enforceability of the terms of settlement and that the plaintiff now seeks to challenge that finding in this proceeding; and

• the effect of the Kelly judgment upon the plaintiff's application in this instance is to invoke the principle that judgments of the Court should not be revisited, as to do so would:

(i) offend the principle that judgments of the Court are final; and

(ii) create the unacceptable risk that the trial judge in the current proceedings may make a finding as to the validity of the process which culminated in the signing of terms of settlement, different to the finding as to the validity of that process made by His Honour Judge Anderson.

14 There can be no argument that it is a well-established principle that judgments of a court are final and that there should be no inconsistency in judicial findings between members of the same court.

15 It is the plaintiff's position that he did not consent to the making of the Orders the subject of the Kelly judgment.

16 The record of the Court shows that the Kelly judgment was entered:

▪ in the course of a trial conducted on that day, in which:

(i) Peter Kelly, was represented by Mr Michael Gronow; and

17 While the plaintiff asserts that he did not appear on that day, was given no opportunity to contest the validity of the terms of settlement and has no understanding of the reason for which the judgment of the Court was entered, that statement by the plaintiff is inconsistent with the record of the Court and I find myself obliged, in the absence of any persuasive evidence to the contrary, to accept the record of the Court as to the fact that the plaintiff was represented and that his consent was given to the making of the Orders.

18 It follows that I am satisfied that the Kelly judgment was both valid and binding.

19 An issue arises as to the circumstances in which the Kelly judgment was entered, namely whether the judgment was entered:

▪ as the result of a determination by the Court as to the merit of the respective position of the parties.

20 Whilst the judgment is recorded as having been made at the trial of the proceedings, my enquiries of the Registry suggest that the judgment did not involve a determination upon the merits.

21 I am satisfied that I should approach my analysis of the defendants' applications on the basis that the Kelly judgment did not involve a determination upon the merits given:

▪ the onus which the defendants have in this instance; and

▪ that this is the position most favourable to the plaintiff.

The approach to be taken in determining the advocate's immunity defence

22 The scope of advocate's immunity in Australia was identified by the High Court in Giannarelli & Shulkes v Wraith[9] ("Giannarelli") and further explained in D'Orta-Ekenaike v Victoria Legal Aid ("D'Orta-Ekenaike").[10]

23 It is clear that advocate's immunity applies to the "in-court" work of an advocate and to certain categories of legal work done out of Court,[11] namely work which is intimately connected with in-court conduct and/or which leads to a decision affecting the conduct of the case in court.[12]

24 It is equally clear that the rationale behind advocate's immunity involves the proposition that "... controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances".[13]

25 Whilst the negligence alleged against each of the defendants by the plaintiff in this instance did not occur "in-court," the issue to be determined by me in this instance is whether the defendants' alleged negligence occurred whilst they were carrying out work which was "work done out of court which leads to a decision affecting the conduct of a case in court".[14]

(i) the retainer of each of the defendants which was limited to the presentation of the plaintiff's defence in the trial of the Kelly proceeding;

(ii) the resolution of the trial in the Kelly proceeding by the parties signing the terms of settlement;

(iii) the judgment of the Court entered on 12 June 2008 in the Kelly proceeding which upheld the validity of the terms of settlement;

I am satisfied that each of these events operate so as to potentially bring into play the advocate's immunity defence.

27 In Goddard Elliot[15] Bell J considered the issue as to whether the law was settled in Australia that advocate's immunity applied to negligent advice which resulted in the settlement of a proceeding and held that the decisions of the High Court in Giannarelli and D'Orta-Ekenaike should be interpreted as extending to the giving of settlement advice which leads to the making of orders by the Court.

28 I am satisfied in this instance that I should follow the decision by Bell J in Goddard Elliot that the current position of the High Court which I must follow is that the defence of advocate's immunity applies to the giving of settlement advice which leads to the making of orders by the Court.

• the decision by Bell J in Goddard Elliott;[16]

• the decision of the New South Wales Court of Appeal in Chamberlain v Ormsby[17] in which the Court commented as to advice given by a barrister which resulted in the settlement of a proceeding:

"[120] In the present case, the barrister gave the subject advice in the context of advising the appellant as to the effect of his acceptance of permanent loss compensation would have upon such common law rights as to damages as he may have had. That advice was critical to the decision of the appellant to accept the settlement that was being offered by the employer's workers compensation insurer with respect to the appellant's ss66 and 67 claims. His acceptance of that settlement was dependent upon, firstly, the advice given by the barrister as to the likelihood of any claim for common law damages exceeding the thresholds and, secondly, the effect that acceptance of permanent loss compensation would have upon his common law rights, such as they were. It is difficult to imagine a stronger case than the present where the advice given by the barrister led to the appellant's decision as to the conduct of his case before the Compensation Court or which was more intimately connected with the course of that case including its settlement.

[121] It follows that in my opinion even if the barrister were negligent (which in my opinion he was not), he was immune from being sued either by the appellant or the solicitor."[18]

Does the advocate's immunity defence apply where it is alleged the client did not have the mental capacity to instruct his lawyers to settle his proceeding?

30 In Goddard Elliot Bell J considered the issue as to whether advocate's immunity should be applied to a circumstance in which a lawyer takes instructions from a client who lacks the mental capacity to give instructions to his lawyers. His Honour found that even in those circumstances the decision in D'Orta-Ekenaike required him to apply advocate's immunity.

31 In making the above finding, his Honour applied the following reasoning:

(i) the test as laid down by the High Court in D'Orta-Ekenaike focussed upon whether or not the activity of the lawyer the subject of the complaint could be appropriately described as occurring in the course of work leading to decisions about or intimately connected with the conduct of the case in Court; and

(ii) if the activity undertaken by a lawyer was appropriately described as a occurring in the course of work leading to decisions about or intimately connected with the conduct of the case in Court, the defence of advocate's immunity applied even:

▪ if the lawyer's client did not have the mental capacity to give instructions to his lawyer;[19] or

▪ where the conduct by a lawyer was misleading or deceptive.[20]

32 I find the approach and analysis adopted by Bell J as to this issue to be strongly persuasive and I am satisfied that I should adopt the same approach to my analysis in this instance.

33 I am satisfied that in this instance I should adopt the analysis applied by Bell J in Goddard Elliot in finding that the decisions of the High Court in Giannarelli and D'Orta-Ekenaike should be interpreted as extending to the giving of settlement advice, and accordingly that the defence of advocate's immunity applies to the advice provided by the defendants which led to the entry of the Kelly judgment.

34 I am satisfied that the work of each of the defendants in this instance is appropriately described as occurring in the course of work leading to the decisions about or intimately connected with the conduct of the case in Court, and accordingly that the defence of advocate's immunity applies to that work even if it was undertaken in circumstances in which the plaintiff did not have the mental capacity to give instructions to his lawyers or if the conduct of the lawyers was misleading or deceptive.

35 I am further satisfied that whilst the Court records suggest that the terms of the Kelly judgment were recorded by consent, the judgment should nonetheless be regarded as a Court order to which the concept of advocate's immunity should be applied.

36 In making that finding I do so following the decision of the New South Wales Court of Appeal in Chamberlain v Ormsby[21] which in turn is consistent with the statements by the High Court in D'Orta-Ekenaike and the approach taken by Bell J in Goddard Elliot.[22]

37 For the reasons set out above I accept the position put by Mr Kempfner on behalf of the defendants in this instance, namely:

• that the retainer by the plaintiff of each of the defendants involved a retainer to represent the plaintiff in the trial initiated by Kelly against the plaintiff;
• that the Kelly proceeding was resolved by the plaintiff entering the terms of settlement;
• that notwithstanding the plaintiff's assertion that the terms of settlement were invalid, the declaration by the Court of 12 June 2008 determined that matter;
• that each of the defendants is entitled to rely upon the principle of advocate's immunity in their defence of the plaintiff's claim in this proceeding as the work performed by the defendants the subject of the claim is appropriately categorised as being work done out of Court which led to a decision affecting the conduct of the case in Court.

• that the defendants are entitled to claim immunity on the basis of advocate's immunity in respect of the claim brought against them by the plaintiff; and

• that the plaintiff's claim against each of the defendants has no real prospect of success.

39 It follows that I am satisfied that the defendants are entitled to the summary judgment which they seek in these applications.

40 Given the pending application to the High Court in Attwells v Jackson Lalic Lawyers Pty Ltd,[23] I will, as I have indicated, hear the parties as to the orders which should be made on the basis of my findings in this instance.

[1] See the particulars under paragraph 37 of the Statement of Claim.

[2] See the particulars under paragraph 38 of the Statement of Claim.

[3] See the particulars under paragraphs 39 and 40 of the Statement of Claim.

[4] See the plaintiff's pleadings against the defendants in paragraphs [44], [45] and [46] of the Statement of Claim.

[5] See the pleadings in paragraphs [47] through to [49] of the Statement of Claim.

[6] [2013] VSCA 158 at paragraph [35]

[7] D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1at 31 paragraph [86]

[9] (1988) 165 CLR 543

[10] [2005] HCA 12; (2005) 223 CLR 1

[11] See Giannarelli (supra) at 560

[12] D'Orta-Ekenaike (supra) at 31, paragraph [86]

[13] D'Orta-Ekenaike (supra) at 17, paragraph [34]

[14] D'Orta-Ekenaike (supra) at 31, paragraph [86]

[17] [2005] NSWCA 454 at paragraphs [120] - [121]

[18] Per Tobias JA, with whom Giles JA agreed

[19] Goddard Elliot (supra) at 832-833

[21] [2005] NSWCA (21 December 2005) [120] (Tobias JA, Giles JA agreeing).

[23] [2015] HCATrans 176