Weller v Phipps

2 The trial judge erred in finding that the timely delivery of professional services by the appellant to the respondent required those services to be delivered by 31 July 2003 In doing so the trial judge impermissibly took into account his own opinion and did not base his findings on the evidence. The only expert evidence was the evidence of Pamela Suttor and it was not even put to her that the solicitor should have given or arranged for counsel to give advice by 31 July 2003. Indeed in circumstances where there is no issue that there was merit in briefing junior counsel and then senior counsel for a second opinion, such a finding does not accord with the evidence of what is to be expected of a reasonably competent suburban solicitor.

3 The trial judge erred in finding breach of contract and negligence in circumstances where: the respondent had not concluded his statement of instructions to the solicitor until 23 October 2003 (Exhibit Q); the uncontested evidence that it was proper professional practice of a suburban solicitor such as the appellant to brief counsel; the solicitor relied on the advice of Mr Williams of counsel who believed the action was justified although difficult (it was not suggested in cross-examination that the advice of Mr Williams could not be reasonably justified); the uncontested expert evidence of Pamela Suttor that it was competent professional practice for a suburban solicitor such as the appellant to investigate the claims being made by the client, including obtaining corroborative evidence, and to brief counsel to advise (including senior counsel).

4 The trial judge erred in finding that any conduct on the part of the appellant was causative of any loss of the respondent, particularly having regard to the following findings of the trial judge: the respondent was unwilling to take competent advice delivered to him by the appellant and Mr Hallen Sc and Mr Williams; it suited the respondent to remain in his grandmother's residence; by refusing to give written instructions to settle the respondent "just prolonged his agony whilst exploring other causes of action"; the fact that final resolution of the litigation was not obtained until 2005 was the fault of the respondent; the respondent "was very anxious to explore any possibility of his remaining in his grandmother's residence"; the respondent was "dilatory in leaving the residence even after he received Mr Hallen's advice and after Mr Barry's advice"; "... as a result of his contact with Mr Barry [the respondent] was reluctant to settle the litigation by giving instructions to [the appellant] and he was not prepared to sign any undertakings regarding costs which were being pressed on him by [the appellant] and by Mr Williams".

5 The trial judge erred in finding that the defence pleaded by the appellant relying on Section 5O of the Civil Liability Act had not been established. The only expert evidence was that of Pamela Suttor who was called by the appellant. Her evidence was to the effect that the appellant acted in a manner that was widely accepted in Australia by peer professional opinion as competent professional practice. There was no expert called by the respondent to the effect that the conduct of the appellant fell short of competent professional practice. There was no suggestion in cross-examination or in submissions that the opinion of the expert Pamela Suttor was irrational. There was no finding that the trial judge considered the opinion of the expert Pamela Suttor irrational.

6 The trial judge erred in finding there was any quantifiable loss in circumstances where: any losses were the result of the respondent's own actions - he would not leave his grandmother's residence and he would not give instructions to settle the litigation; there is no evidence to demonstrate that the respondent would have taken a different course assuming non-negligent conduct; the respondent received offsetting benefits in any event by remaining in possession of the grandmother's residence until July 2004; no loss should be shot home to the solicitor in circumstances where another solicitor provided contrary advice to the client, i.e. not to instruct the solicitor regarding settlement of the litigation. 57 There is a notice of contention, the substance of which is set out in grounds 12 - 14 as follows: 12. Further or in the alternative the Respondent contends that: a. The Appellant failed to warn the Respondent that there was a fundamental threshold issue namely whether the Respondent could pursue his claim.

b. The court would accept that the Trial Judge did not make specific findings of the dispute concerning the failure to warn however such a finding in the Respondent's favour implicitly arises from: i. His Honour's finding at page 21 that the Appellant believes that the causes of action did have good prospects of success;

ii. The objective evidence of the Appellant's activities during that time including preparing draft summonses and affidavits to pursue the Respondent's claim and writing to the Respondent and asking whether the Respondent wished to be the Plaintiff or Defendant concerning the claims;

iii. The Plaintiff's direct evidence on these issues from which he was not shaken by lengthy cross-examination;

iv. The Trial Judge' s general acceptance of the evidence of the Plaintiff, with the exception of the Plaintiff's evidence on one collateral issue upon which the Trial Judge found the Respondent was mistaken. In particular, the Trial Judge preferred the Respondent's evidence against that of the Appellant on the issue of whether the Appellant had provided the Respondent with a copy of Mr Williams' advice 6 November 2003 or conveyed the thrust of it to the Respondent;

v. To the extent that it could be argued that the Appellant's diary notes supported his version of events, the Respondent submits that the Appellant's diary notes should not be accepted if they support the Appellant's position unless corroborated due to the falsity of at least some of the diary notes.

13. The Respondent contends that in either giving the advice that the causes of action had good prospects of success or in failing to address the threshold issue of whether the Respondent could pursue his claim, that the Appellant failed to exercise reasonable care and skill in the provision of professional advice.

14. The Respondent contends that the Appellant in exercising reasonable care and skill in the provision of professional advice in the period from 29 May 2003 was required to promptly address the threshold issue of whether the Respondent could maintain his claim by either procuring advice from competent counsel or alternatively providing that advice himself. That advice was provided by Mr Hallen SC and Mr Williams in conference on 23 February 2004, nearly nine months after the discussion on 29 May 2003. 58 As I understand the grounds and submissions, it is convenient to address the following issues:

(1) Did the primary judge err in concluding that Mr Weller breached his duty in failing to address the threshold issue ( Anshun estoppel and issue estoppel) in a timely fashion, in particular by failing to obtain counsel's advice by 31 July 2003, having regard particularly to the pleadings, the circumstance that it was not put to Mr Weller or to Ms Suttor that he should have obtained advice by 31 July 2003, the original advice of Mr Williams, and the evidence of Ms Suttor? (Grounds of appeal 1-3.)

(2) If so, should the primary judge have found that Mr Weller breached his duty in failing himself to warn Mr Phipps that there was such a threshold issue? (Notice of contention.)

(3) In either case, did Mr Weller make out a s 5O defence? (Ground of appeal 5.)

(4) Did the primary judge err in finding that the breach of duty by Mr Weller caused loss to Mr Phipps, having regard to Mr Phipps' own unreasonable conduct? (Grounds of appeal 4 and 6.) 59 I note that no point was taken at the trial and no point is taken on appeal as to whether any issue estoppel was raised by the decision in the Local Court to give judgment to Mr Weller for costs of $22,180.30; and accordingly I will not consider that matter in this judgment.

Delay 60 Mr Dempsey SC for Mr Weller submitted that the relevant standard of care was that of a suburban solicitor, and that the onus was on Mr Phipps to establish what that standard required. There was no evidence that the application of that standard required Mr Weller to provide advice by 31 July 2003, or that a competent solicitor in Mr Weller's position would have been alerted to the threshold estoppel issue. The primary judge impermissibly applied his own opinion, uninformed by the evidence. 61 Mr Dempsey submitted that the issue of delay, on which the primary judge found for Mr Phipps, was not raised by the pleadings, and that it was never put to Mr Weller or to Ms Suttor that Mr Weller should have obtained counsel's advice by 31 July 2003. He submitted that Mr Williams advised that the proposed defence and cross-claim had reasonable prospects of success, and no criticism was made of his advice. He submitted that the evidence of Ms Suttor was to the effect that the course taken by Mr Weller was reasonable, and the primary judge should not have dismissed that evidence, and he gave no adequate reasons for doing so. 62 In my opinion, the plaintiff's statement of claim alleged to the effect that Mr Weller did not (at least prior to 23 February 2004) advise Mr Phipps that he had no claim with any prospect of success that could support his continued occupation of the Richmond house, and that on the contrary at all times (up to that date) had represented to him that he had reasonable prospects of succeeding on such a claim; and that this amounted to a breach of duty that caused the losses particularised. It is true that the statement of claim did not specify any particular time prior to 23 February 2004 when Mr Weller should have advised Mr Phipps that he had no claim (or procured that such advice be given to Mr Phipps), or should have withdrawn his representation to him that he had reasonable prospects of succeeding in such a claim; but in my opinion the question of when these things should have happened was sufficiently raised by the statement of claim. 63 It is true that initially Mr Williams advised that Mr Phipps had a possible defence to the executors' claim for possession, and that no criticism was made of Mr Williams. But once Mr Williams had been provided with the Family Provision Act judgment, he promptly advised that those proceedings and that judgment raised serious difficulties for Mr Phipps. It is true that Mr Williams did not identify the core problem of issue estoppel, or even Anshun estoppel, but he did recognise that the proceedings and judgment made it unlikely that Mr Phipps' claim could succeed. 64 Although it was not in terms put to Mr Weller or Ms Suttor that Mr Weller should have obtained counsel's advice by 31 July 2003, or otherwise himself given correct advice by that time, the thrust of the cross-examination of both of them was that Mr Weller should have quickly recognised the threshold problem raised by the Family Provision Act proceedings and judgment, and should have taken action to resolve that problem within a reasonable time, rather than spending several months in seeking to obtain a full statement from Mr Phipps and to obtain statements from other witnesses. 65 The question then is whether there was evidence supporting the primary judge's conclusion that there was a breach of duty by Mr Weller, and whether the primary judge was justified in not accepting contrary evidence from Ms Suttor. 66 In my opinion, there is one matter about which there can be no doubt. Mr Weller had, by his conduct at least, represented to Mr Phipps that it was a worthwhile exercise to incur substantial legal costs in preparing evidence to support a claim for the house, and to incur the risk of loss of interest on the legacy and of liability for legal costs of possession proceedings, while doing so. The advice of Mr Williams given on 6 November 2003 to the effect that it was unlikely that such a claim should succeed should have been promptly conveyed to Mr Phipps; and in my opinion, in circumstances where there was a continuing representation by Mr Weller that the costs and risks were worthwhile, there was an evidentiary onus on Mr Weller to show that he did convey the effect of that advice to Mr Phipps. The primary judge found that this evidentiary onus was not discharged, and no challenge is made on appeal to that finding. It was in my opinion clearly a breach of Mr Weller's duty to continue, after 6 November 2003, to represent to Mr Phipps that the costs and risks of the continued preparation of his case were worthwhile, without conveying to him the effect of Mr Williams' advice. Such a finding however would give rise to different questions of causation of damage from those raised by the finding actually made by the primary judge. 67 There is some force in Mr Dempsey's submission that there was a lack of evidence as to what was required by the standard of skill and care of a suburban solicitor. However, the case was not being decided by a jury. It is accepted that a specialist tribunal, such as the Workers Compensation Commission that previously existed in New South Wales, can bring specialist knowledge (in the case of the Workers Compensation Commission, knowledge concerning workplace safety) to bear in deciding cases, so long as natural justice is afforded. In my opinion, much the same applies in the case of determination by a judge of what is required by a standard of reasonable skill and care of a legal practitioner. 68 In Neagle v Power [1967] SASR 373 at 376, Bray CJ considered the necessity of adducing expert evidence to ascertain the standard of care normally exercised by land brokers, and explained: Such evidence has not been thought necessary in the case of actions against solicitors. The Court presumably knows for itself what the ordinary reasonably prudent and careful solicitor ought to know and to do.

Subsequently, in Jennings v Zilahi-Kiss (1972) 2 SASR 493 at 513, Bray CJ endorsed this statement, saying: That is true as a general proposition, but expert evidence from solicitors has occasionally been called…There are obviously some mistakes or neglects of which a court can say no reasonably careful solicitor would have been guilty.

Bray CJ's statement in Neagle v Power has been quoted with approval by the Full Court of the Federal Court of Australia in Fox v Everingham (1983) 76 FLR 170 at 179 (Woodward, Muirhead and Sheppard JJ) and Amadio Pty Ltd v Henderson (1998) 81 FCR 149 at 217 (Northrop, Ryan and Merkel JJ); and see also Attard v James Legal Pty Ltd [2010] NSWCA 311 at [131] - [132] (Tobias JA, Beazley and Giles JJA agreeing). 69 In Waimond v Byrne (1989) 18 NSWLR 642 at 654, Kirby P said: In default of any evidence as to professional standards or common practice in a situation such as the present, it falls to the court itself to provide its definition of the scope of the duty of care owed by reference to general principles.

This was quoted with approval in Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1 at [155] (Malcolm AJA). 70 In Yates Property Corporation v Boland (1998) 85 FCR 84 at 111, the Full Federal Court (Drummond, Sundberg and Finkelstein JJ) said: We think that a court is well placed to determine the liability in negligence of a legal practitioner without the aid of such evidence where questions of particular practice do not arise. 71 The correctness of this approach appears to have been assumed by the High Court of Australia in Hawkins v Clayton (1988) 164 CLR 539. 72 However, there is authority cautioning against a court coming to its own view without the benefit of expert evidence. In Moy v Pettman Smith (a firm) [2005] UKHL 7; [2005] 1 WLR 581 at [19], Lord Hope said: Where a claim is brought for professional negligence the court will usually expect to be provided with some evidence to enable it to assess whether the relevant standard of care has been departed from. No such evidence was adduced in this case. Judges, recalling how things were when they were in practice, no doubt feel confident that they can do this for themselves without evidence. But judges need to be careful lest the decision in the case depends on the standard they would set for themselves. If this were to happen, it would vary from judge to judge and become arbitrary. Considerable weight should therefore be given to the decision of the judge at first instance who heard all the evidence. 73 Baroness Hale agreed with Lord Hope and added (at [26]): In claims against members of other professions, the court will have expert evidence on whether their conduct has fallen short of this standard. In cases against advocates, however, the court assumes that it can rely upon its own knowledge and experience of advocacy to make that judgment. This brings, as Lord Hope has pointed out, an obvious risk that a judge will ask himself what he would have done in the particular circumstances of the case. But that is not the test. The doctor giving expert evidence in a medical negligence claim is not asked what he himself would have done, but what a reasonable doctor might have done. 74 In the present case, the breach as found by the primary judge did not relate to a specialised area of practice. Rather, it related to a solicitor's failure to identify and communicate a significant obstacle to his client, and a failure to obtain counsel's opinion to verify the existence of the obstacle. It is something that can reasonably be regarded as a matter of common sense, or, to adopt the phrase of Bray CJ in Jennings v Zilahi-Kiss, a mistake of which a court can say no reasonably careful solicitor would have been guilty. 75 In my opinion, it was open to the primary judge to consider that a legal practitioner of any degree of expertise, who undertakes litigation work, should have recognised that the existence of a court decision, to the effect that $150,000.00 should be paid to a person out of an estate consisting primarily of a house, could raise a substantial difficulty to a subsequent claim to the house by that person against the estate; and that before substantial costs and risks were incurred in pursuing such a claim, the question of this difficulty should be resolved with reasonable expedition. This issue was raised squarely and openly in the conduct of the case, and in my opinion there was no denial of natural justice in the primary judge taking that view. It is a view with which I agree. 76 There was evidence from Ms Suttor that could be considered as having a contrary effect. She said in effect that it was appropriate, or at least within reasonable judgment, to complete the process of obtaining statements before obtaining counsel's advice as to the prospects of success. There is a question whether or not expert witnesses can give evidence in that form: Permanent Trustee Australia Limited v Boulton (1994) 33 NSWLR 735. My own view is that, if the facts about which the opinion is given are sufficiently identified and if the expert is sufficiently qualified, an expert can express an opinion as to what a reasonably competent and careful solicitor would do in those specified circumstances: Rabelais Pty Limited v Cameron [1993] ANZ Conv Rep 457, referred to in Boulton at 739. 77 However, such evidence is not as such evidence as to the practice of competent and careful solicitors; and it is not conclusive. In my opinion, it was open to the primary judge not to accept evidence to that effect. 78 In my opinion, no error is shown in the primary judge's conclusion to the effect that a reasonably competent and careful solicitor, if not himself or herself in a position to give the advice that Mr Phipps' claim could not succeed, should have obtained counsel's opinion by 31 July 2003 or thereabouts. 79 For those reasons, in my opinion grounds 1 to 3 of the appeal fail.

Failure to warn 80 Having regard to what I have said, it is not necessary to consider the notice of contention. I am inclined to the view that a finding that it was a breach of duty for Mr Weller not himself to have recognised the fatal difficulty in Mr Phipps' claim would not have been justified. I think the correct analysis is that he should have recognised a potential severe problem, and taken reasonably prompt steps to resolve that problem before substantial risks and costs were incurred, as discussed previously.

Section 5O 81 The onus of establishing a defence under s 5O was on Mr Weller. 82 In my opinion, the evidence from Ms Suttor did not support a view that delaying as discussed above can be characterised as acting "in a manner that … was widely accepted in Australia by peer professional opinion as competent professional practice". Ms Suttor's written opinion supported the view that each of the steps taken by Mr Weller was widely accepted as competent professional practice; but did not address the question of whether doing them in the order in which they were done or at the time at which they were done was acting in a manner that was so accepted. And it did not address the question whether failure to identify the potential problem and failure to resolve that problem any earlier than 23 February 2004 was acting in a manner that was widely accepted as competent professional practice. Her oral evidence did not relevantly take the matter further: her opinion that the order in which things were done was appropriate was not an opinion as to whether what was actually done was acting in a manner that was so accepted.

Causation of damage 83 It is clear that Mr Phipps did act unreasonably in various respects, and that some of his losses were due to his own unreasonable conduct. 84 However, in my opinion this was properly taken into account by the primary judge; and the primary judge did properly address the question of what loss was caused by Mr Weller's breaches of duty. In my opinion, no error has been identified in the way in which the primary judge dealt with that question.

Conclusion 85 For those reasons, in my opinion the appeal should be dismissed with costs. 86 YOUNG JA: I agree with Hodgson JA. **********

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