The matters before me are a Summons filed on 2 April 2015 and a Notice of Motion filed on 2 July 2015. The Summons seeks the transfer of Local Court proceedings to this court and then, if the transfer is granted, leave to file a Cross-Claim. The Notice of Motion, assuming the matter is transferred to the District Court, seeks an order that the Defence be struck out. Because the identity of the parties (plaintiff and defendant) switches as between the Local Court proceedings and the Summons I will refer to the parties as the solicitor and the barrister.
The solicitor had clients, Mr and Mrs Wharton ("the Whartons"), who were involved in proceedings in the Federal Court of Australia. The solicitor briefed the barrister to prepare the matter for trial and act as counsel for the Whartons in the hearing which was to take place in the Federal Court sitting in Brisbane. A costs agreement was made between the barrister and the solicitor.
The matter was listed to run from 2 to 13 June 2014. Although there is no specific evidence to this effect the written submissions on behalf of the solicitor indicate that the barrister was briefed on the basis that he would prepare the case for trial but the solicitor would not be involved in order to save costs.
On 10 April 2014 the barrister told the solicitor that he would be overseas from 12 April to 9 May 2014 and that the matter was ready for trial. The solicitor, apparently taken aback by the barrister travelling overseas so close to the hearing, examined the case and came to the view that the case was not ready for trial and much work was needed. He accordingly briefed a new barrister, from the Brisbane Bar, and terminated the barrister's retainer.
The Federal Court proceedings commenced as scheduled on 2 June 2014 but were resolved by agreement between the parties on 6 June 2014.
On 10 November 2014 the barrister commenced proceedings in the Local Court claiming $57,696.50 for outstanding fees. He also claimed interest. On 8 December 2014 the solicitor filed a Defence. An Amended Statement of Claim was filed on 20 January 2015. A Reply was filed on the same date.
Turner v Stewart Alan Levitt t/as Levitt Robinson Solicitors [2015] NSWDC 137 | Case summary | Zoe
On 23 March 2015 the solicitor filed an Amended Defence and a proposed Cross-Claim.
The Amended Statement of Claim, the Defence to it and the Cross-Claim are annexed to the affidavit of Stewart Levitt dated 31 March 2015.
There was no issue that the solicitor had not made an application for the assessment of the barrister's fees under the Legal Profession Act 2004 (the "LPA"), and that such an application was now out of time.
The Summons was filed to transfer the matter to the District Court because the quantum of the Cross-Claim exceeds the monetary jurisdiction of the Local Court.
The barrister does not oppose the transfer to the District Court. The barrister says, however, that once the transfer has been effected, the Defence should be struck out and leave should not be given to file the Cross-Claim.
In simple terms it was submitted that this should be done because the allegations made in the Defence and the Cross-Claim are doomed to failure. This is due to the barrister being protected by the immunity he carries as an advocate.
For purposes of the argument before me, the barrister accepted the facts alleged in the Defence.
The solicitor submitted that the allegations contained in the Defence and Cross-Claim are not issues of advocate's immunity, rather they concern breach of an agreement and whether or not the charges levied by the barrister were fair and reasonable.
The written submissions on behalf of the barrister conceded that "In determining the questions before the Court, it is appropriate to apply the settled test to applications for summary dismissal of proceedings, ie whether Levitt's claims in the defence and proposed cross claim are "so obviously untenable that [they] cannot possibly succeed": General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129"."
Notwithstanding this concession it was also submitted that "if the immunity question is to be determined prior to the determination of the question of negligence, it ought properly be able to be dealt with on the pleadings as a strike out application" (relying on the judgment of Beazley P in Donnellan v Woodland [2012] NSWCA 433.
The argument between the parties focused on two primary questions:
1. Does the conduct alleged by the solicitor against the barrister attract the immunity?
2. Could the solicitor maintain the allegation that the fees were not fair and reasonable despite not having had those fees assessed under the LPA?
I think the starting point is to look at the Defence filed by the solicitor.
In paragraph 12 the solicitor says that the costs were not fair and reasonable and that, as I read the paragraph, separately, the work done by the barrister was wasted by his breach of the agreement as set out in paragraph 19.
Paragraph 19 provides the particulars for why the case had not been properly prepared in turn leading to the necessity to expend extra costs and brief another barrister. Paragraph 19(e) provides 12 particulars.
The defendant submitted that the particulars provided in paragraph 19 of the Defence are allegations of negligence by the barrister which fall within the compass of his advocate's immunity.
It is important to note at this stage that other than the allegation that the charges were not fair and reasonable no allegation is made that the work in respect of which the $57,696.50 was levied was not done or not done competently.
It is also important to note that the claim for damages is made by the solicitor, not by the Whartons. The solicitor alleges that he personally bore the extra costs associated with preparation and, in addition, he suffered his own losses, such as being deprived of attracting other work that might have flowed from a successful running of the case.
The solicitor submitted that advocate's immunity was not applicable in this case because:
1. The solicitor's allegations were of breach of contract or of misleading and deceptive conduct, but not of negligence.
2. There was no attack on the final result in the Federal Court.
3. In any event, the wrongdoings of the barrister fell outside the bounds of an advocate's immunity.
The written submissions on behalf of the solicitor on the issue of advocate's immunity begin with this sentence:
"The advocate's immunity protects lawyers in certain circumstances from suits for professional negligence, whether the action in negligence lies in tort or contract or as some similar statutory underpinnings."
The above quote seems to contradict the overall submission by the solicitor distinguishing an action in negligence from an action in contract. Nevertheless the written submissions later identify the breaches of contract as the failure to prepare the case to a state of readiness, the failure to inform the solicitor that this had been done by a certain date and, in support of the misleading and deceptive conduct allegation, the barrister's representations that the matter was ready for a hearing when it was not.
I think these allegations are as much allegations of negligence as they are of breach of contract or deceptive and misleading representations. More importantly the particulars given in paragraph 19(e) of the Defence are in my view plain allegations of negligence.
In addition I think the authorities state that it does not matter to the application of the advocate's immunity if the allegations are styled in contract or in negligence. This seems clear, for example, from paragraph 85 in D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1, and in Nikolaidis & Anor v Satouris & Ors (2014) 317 ALR 761 at paragraph 5.
The solicitor relied on paragraph 175 of the judgment of McHugh J in D'Orta, submitting that the examples highlighted limit the extent to which the advocate's immunity can be relied upon. It was also submitted that this paragraph is consistent with the validity of an action for breach of a contract of retainer. I disagree with the solicitor's submission, preferring to rely on the judgment of the plurality which I think makes it clear that allegations made in this case fall squarely within an advocate's immunity.
Accordingly I reject the submission that any distinction can be made by pleading the matter as a breach of contract or breach of statutory obligation rather than as an action in negligence. In any event I am of the view that the allegations of breach of contract and of misleading and deceptive conduct are in reality allegations of negligence.
Turning now to the solicitor's submission that the finality of the case was not affected, I do not agree that the point is of significance. I think I need state no more than that this conclusion plainly flows from D'Orta (for example paragraph 67 to 69) and is also evident in Kendirjian v Lepore [2015] NSWCA 132 at paragraphs 42, 52 and 53.
The next point is whether the matters complained of by the solicitor fall within the advocate's immunity. It was conceded by the solicitor that immunity could extend to out of court conduct. It was submitted however that the line in this case was drawn on the non-applicable side of the test. Both sides referred to D'Orta to advance their arguments. In addition I was taken to Donnellan where approval was given to this statement from Rees v Sinclair [1974] 1 NZLR 180 at 187, that conduct was within the immunity if it was "work so intimately connected with the conduct of the cause in court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing".
In this matter the conduct complained of centres on the preparation of the case for hearing. The conduct of a case, as a general statement, is a product of the manner in which it has been prepared. To take some examples from the allegations in paragraph 19(e) the failure to ensure that the forensic expert report would be admissible, the failure to ensure affidavit material was prepared and from appropriate witnesses and the failure to discover relevant documents are all matters which are intimately connected with the upcoming conduct of a case.
I am satisfied that the allegations made against the barrister in respect of his failures concerning the preparation of the case are failures of a type falling within the advocate's immunity.
The result is that once again I reject the solicitor's submission limiting the application of advocate's immunity. The result is that I am of the view that those allegations in the Defence that raise the advocate's immunity, and as a result the whole of the Cross-Claim, should not be allowed to go to trial. My satisfaction is to the level required in the General Steel test.
The next question is whether or not the solicitor can attack the quantum of the costs sought by the barrister on the basis that they were not fair and reasonable.
The barrister initially submitted that the failure to have his costs assessed under the LPA was fatal to the solicitor's defence. It was submitted that the LPA provided an exclusive regime for the pursuit of costs by a barrister and if the avenue provided for testing those costs, by way of assessment, was not followed then there could be no challenge to the quantum on the basis that it was excessive.
The solicitor submitted that the LPA was not so confined. I was referred to the decision of the NSW Court of Appeal in Branson v Tucker [2012] NSWCA 310. The facts in Branson are different and in a sense 'the other way around' but there is enough in the judgment to raise the possibility that the LPA does not provide an exclusive regime for dealing with a dispute arising from a cost agreement.
I should add this: Reliance on Branson was foreshadowed by counsel for the solicitor but provided to me after I reserved my decision. Following the receipt of the authority the barrister's counsel properly sent an email to my associate conceding that "the Court can have jurisdiction to determine the issue of whether costs charged are fair and reasonable in the absence of an assessment under the Legal Profession Act."
The result of the orders that I will make is that the proceedings will be transferred to this court but that leave will not be given to rely on a Cross-Claim. In addition, parts of the Defence will be struck out. All of this will mean that what remains in this court is only the claim by the barrister for his fees. The quantum of this claim is within the Local Court's jurisdiction. Theoretically, therefore, the matter could be transferred back to the Local Court under Section 146 of the Civil Procedure Act 2005. Although the matter was canvassed during discussion, full argument was not heard so that I think it preferable to leave the matter in the District Court subject to either party making an application for transfer back to the Local Court.
I make the following orders:
1. On the Summons filed on 2 April 2015: Local Court proceedings 2014/331088 are transferred to the District Court pursuant to Section 140(2) of the Civil Procedure Act 2005.
2. On the Notice of Motion filed on 2 July 2015:
1. In paragraph 12 of the Defence to the Amended Statement of Claim all of the words after the word "reasonable" are struck out pursuant to Rule 14.28(1)(a) of the Uniform Civil Procedure Rules 2005.
2. Paragraphs 19 to 40 inclusive of the Defence to the Amended Statement of Claim are struck out pursuant to Rule 14.28(1)(a) of the Uniform Civil Procedure Rules 2005.
It is implicit in the orders that I have made that the leave sought by the solicitor to rely on a Cross-Claim is refused.
I will hear the parties on costs.
[2]
Amendments
1. Change of representation detail on Title Page
2. Deletion of the number 12 in paragraph 41(2)(a).
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Decision last updated: 28 July 2015
Parties
Applicant/Plaintiff:
Turner
Respondent/Defendant:
Stewart Alan Levitt t/as Levitt Robinson Solicitors