Wilson v Carter & 5 Ors; Wilson v Rigg

Supreme Court of NSW|2005-05-13|Before: Rothman J

The Application of Walmsley v Cosentino to Barristers 77 In Walmsley v Cosentino [2001] NSWCA 403, the Court of Appeal adumbrated the principle that, by reason of the relationship between solicitor and client, a solicitor was under a duty to advise the client of a cause of action or possible cause of action and the time before which such proceedings would need to be commenced in default of which such proceedings would, themselves, become time barred. (see [56] of Walmsley) 78 It is not clear whether Walmsley was a statement of contractual or tortious duty. It requires a solicitor to act against his or her own interests and advise on a matter in which , but for Walmsley, there is no duty to act. It requires a positive act on a separate and quite distinct cause of action. It may, as earlier recited, be part of a more general duty, that, by reason of certain relationships, exists and under which a party "would not, without reasonable and proper cause, conduct [himself or herself], in a manner likely to destroy or seriously damage the relationship of trust and confidence" (see Malik, infra). It is difficult, if such a duty were to exist, to think of a more suitable relationship, than solicitor-client, for its inclusion. 79 If the duty were based upon such a concept it would be fundamentally contractual. There are significant differences between the relationship between solicitor and client and between barrister and lay client. (I do not here include the situation where there is direct access.) 80 On one view, the traditional view, there is no contract between barrister and lay client. Any contract is between client and solicitor and between solicitor and barrister. Moreover, in circumstances of the kind of duty sought here to be imposed, there are significant differences in the duty and relationship: a The barrister is a potential witness, but not a party, in proceedings between client and solicitor; b The barrister has information which may be confidential to either the solicitor or client and may not be known by the other party; and c The barrister may have reasonable grounds to believe that his or her own conduct may be attacked.

In those circumstances the law requires the barrister not to advise. (See Rule 87 of Bar Rules, given effect at the relevant date by s.57A and s.57D of the Legal Profession Act 1987 (NSW ) and today by s.711 of the Legal Profession Act 2004 ). 81 Further, the barrister would be required to breach the duty to the solicitor in order to comply with the duty to the client in circumstances where the barrister cannot be required to deal directly with the client and is not briefed (nor could be briefed) to advise on such a cause of action. It, of course, would be very different if the original negligence, on which independent advice were required, were that of the barrister. 82 Further, in this case, the barrister, S Stanton, did inform the solicitor, Jack Rigg, of the need to advise the client to obtain independent legal advice and did so on or about 2 July 1997, some 12 months prior to the expiration of the relevant time limitation. On at least one view of the relationship between barrister, solicitor and client that was notification to the client, the information in which was not conveyed by the solicitor to the client and, therefore, gave rise to a quite different breach of duty by the solicitor. 83 It is submitted by Senior Counsel for S Stanton that the nature of the duty described by the Court of Appeal is not applicable to barristers. 84 The considerations above show that such an argument has significant force. However, the principles applicable to an application for summary judgment must allow a party to establish facts upon which an arguable extension of the law can be based. Whatever the force of the argument of Senior Counsel for the barrister, S Stanton, the plaintiff ought not be denied the ability to argue for extension of Walmsley v Cosentino to counsel and to establish the facts to form the basis of that argument. I reject the notice of motion insofar as it seeks the dismissal or striking out of the claim against S Stanton based on a failure to advise as a separate cause of action against the solicitor or advise the client to obtain independent legal advice either at all or at a time that would allow an action to be commenced.

CONCLUSION 85 I have accepted that two of the three classes of claim against Stanton are, on authority binding on the Court and on the facts alleged in the Further Amended Statement of Claim as explained by evidence tendered on the motion, unarguable and, in accordance with the strict tests in General Steels, should be struck out. I will hear the parties further, to the extent desired, on the form of orders, but, at present and subject to any further submission, propose the following orders: a The Second Cross Claim in proceedings 20364 of 1998 in this Court be struck out; b As a consequence of Order (a) above, the Third Cross Claim in proceedings 20364 of 1998 in this Court be struck out; c In proceedings in this Court, being 20447 of 2001, the entirety of paragraphs 27(a), 27(b) and 33(a), of the Further Amended Statement of Claim be struck out; d In proceedings in this Court, being 20447 of 2001, in the Second Cross Claim the following paragraphs are struck out: i. Paragraph 11 insofar as it repeats paragraphs 16, 17, 20, 21, 22, 23, 24, 25 and 26 of the Further Amended Statement of Claim; ii. Paragraphs 12, 13, 14 and 15 in their entirety. e The defendant in 20364 of 1998, Jack Rigg, pay one third of the Second Cross Defendant's costs of the motion as taxed or agreed, to be payable forthwith; f The plaintiff and fifth defendant in proceedings 20447 of 2001 pay a further one third of the Second Cross Defendant's costs of the motion as taxed or agreed; g Two thirds of the Plaintiff's costs of the motion will be the Plaintiff's costs in the cause.

I will hear the parties on the above orders and, in particular, the liability as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Legal Profession Act 1987(NSW)

Legal Profession Act 2004(NSW)

CITATION : Wilson v Carter & 5 Ors; Wilson v Rigg [2005] NSWSC 1351

Wilson v Rigg [2000] NSWSC 16 Wilson v Rigg [2002] NSWCA 246 General Steel Industries v Commissioner for Railways (1964) 112 CLR 125 Agar v Hyde (2000) 201 CLR 552 D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755, 214 ALR 92, [2005] HCA 12 Giannarelli v Wraith (1988) 165 CLR 543 Boland v Yates (1999) 74 ALJR 209 CASES CITED : Saif Ali v Sydney Mitchell [1980] AC 198 Rees v Sinclair [1974] 1 NZLR 180 McRae v Stevens (1996) Australia Torts Report 81-045, 18.10.96, (BC9604869) Keefe v Marks (1989) 16 NSWLR 713 Hawkins v Clayton (1998) 164 CLR 539 Malik and Mahmud v BCCI [1998] AC 20 Walmsley v Cosentino [2001] NSWCA 403

EXTENSION OF TIME APPLICATION: COUNSEL IMMUNITY 34 The plaintiff's action against the SRA became statute barred on 2 July 1992 and initiating process (Statement of Claim) was filed on 13 September 1994. S Stanton was briefed in 1996 in relation to bringing an application for extension of time under s.52(4) of the Motor Accidents Act which was filed on 1 November 1996. 35 The defendant, SRA, on 20 August 1996, moved the Court for summary dismissal of the proceedings relying on the affidavit of Bernie McDade sworn 12 August 1996 and attaching relevant evidence of the first notice of the claim. This motion was adjourned and ultimately heard by Associate Justice Malpass together with the motion by the Plaintiff for extension of time. The application for extension of time was supported by an affidavit of the instructing solicitor, Jack Rigg, a statutory declaration in or to the same effect and an affidavit and statutory declaration by the plaintiff, each of which were served (and it seems filed) on 16 October 1996 and the notice of motion was filed on 1 November 1996. 36 When the matter was listed on 4 November 1996 it was adjourned until 5 December 1996 (which date was to be confirmed) for hearing. On 5 November 1996, S Stanton wrote to Mr Rigg insisting on further affidavits "with more detailed material in support of the motion". There was consent, initiated by the SRA, for the hearing of the two motions to be "stood over until next year" and the SRA required the deponent of each affidavit for cross-examination. On 4 February 1997 two further affidavits were filed and served on behalf of the SRA being affidavits of Robert J Walters and Bernie McDade each sworn on 31 January 1997 going to prejudice and annexing statements of potential witnesses. The matter came on for hearing before Associate Justice Malpass on 18 April 1997 and judgment issued on 3 June 1997 in which judgment his Honour refused the extension of time and granted, accordingly, the summary dismissal of proceedings. The reasons for judgment speak for themselves and concern predominantly the reasons for delay and the prejudice to the SRA. 37 These factual allegations, with somewhat less detail, form the basis of the alleged second ground for the claim of negligence against S Stanton. 38 The extracts of the Further Amended Statement of Claim in the 2001 Proceedings relating to this claim are set out above. Further in the Amended Second Cross Claim in the 1998 Proceedings, Mr Rigg alleges against S Stanton, in substantially identical terms, similar breaches of duty as is alleged in the 2001 Proceedings against him. 39 Essentially the breach of duty in this claim against S Stanton is said to have been, broadly summarised, failing to prepare witnesses and/or affidavits that answered adequately the case against them and failing to provide the detail necessary in the evidence adduced to the extent that each of those is different from the other. There is also a claim relating to a failure to seek an adjournment. 40 On this claim, Senior Counsel for S Stanton relied on counsel's immunity. 41 As best as it can be understood, the argument advanced by the Plaintiff to this submission was that the conduct that was said to found negligence was not sufficiently connected with the conduct of the case in Court for the immunity to arise. It was submitted , as I understand it, both in support of the argument concerning "insufficient connection" and also as a qualification, otherwise applicable to the immunity of counsel for work outside court, that the immunity applies only to a "deliberate strategic decision" of counsel and not to a "simple failure to advert or attend to a matter". 42 In other words, the immunity (assuming, against the plaintiff's first argument, it otherwise related to conduct intimately connected with the conduct of a case in court) applied to the deliberate decision to call as witnesses Jack Rigg and the plaintiff but does not apply to the failure to call other witnesses or adduce other evidence (assuming that such a "failure" was not deliberate). 43 It is not pleaded, nor is it obvious that there is some other aspect of the case that suggests, that there was a failure by S Stanton to turn his mind to evidence necessary to pursue the extension of time application. On the contrary, the pleadings assert the steps taken and include the calling of evidence. The affidavit material recites a letter from S Stanton to Jack Rigg seeking further details (see [33] infra) to support the motion. Rather, it is said, that S Stanton did not sufficiently turn his mind to the issue and accordingly breached his duty of care. 44 The issue of counsel's immunity from suit has recently (10 March 2005) been the subject of definitive exposition by the High Court. In D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR, 755; 214 ALR 92 [2005] HCA 12 (D'Orta), the High Court resolved whether the Australian common law would continue to recognise the immunity. The High Court held that it was still part of the law of Australia, predominantly for reasons associated with public policy, associated with the place of the judicial system and the finality of judicial determination of controversies. In so doing the Court held that Giannarelli v Wraith (1988) 165 CLR 543 should not be re-opened. 45 It is important to understand the rationale of the majority in order to deal with the arguments presented on this aspect of the claim. The majority in D'Orta summarises Giannarelli as standing, in part, for the proposition that "at common law an advocate cannot be sued by his or her client for negligence in the conduct of a case in court, or in work out of court which leads to a decision affecting the conduct of a case in court." (D'Orta at [1]). The joint judgment (Gleeson CJ, Gummow, Hayne and Heydon JJ) described the appropriate nexus with work in court as that which is "intimately connected" (see [86] of D'Orta). 46 I repeat some extracts of the joint judgment which extracts deal with the need, as determined by majority of the High Court, to maintain the immunity. "[34] A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances. That tenet finds reflection in the restriction upon the reopening of final orders after entry and in the rules concerning the bringing of an action to set aside a final judgment on the ground that it was procured by fraud. The tenet also finds reflection in the doctrines of res judicata and issue estoppel. Those doctrines prevent a party to a proceeding raising, in a new proceeding against a party to the original proceeding, a cause of action or issue that was finally decided in the original proceeding. It is a tenet that underpins the extension of principles of preclusion to some circumstances where the issues raised in the later proceeding could have been raised in an earlier proceeding. [35] The principal qualification to the general principle that controversies, once quelled, may not be reopened is provided by the appellate system. But even there, the importance of finality pervades the law. Restraints on the nature and availability of appeals, rules about what points may be taken on appeal and rules about when further evidence may be called in an appeal (in particular, the so-called "fresh evidence rule") are all rules based on the need for finality. As was said in the joint reasons in Coulton v Holcombe: "[i]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial". … [37] Parties who fail in litigation, whatever its subject, may well consider the result of that litigation to be wrong, even unjust. Seldom will a party have contested litigation without believing, or at least hoping, that it will be resolved in that party's favour. If that party does not succeed, an explanation for failure may be sought in what are perceived to be the failures of others - the judge, the witnesses, advocates - anyone other than the party whose case has been rejected. … [42] In R v Skinner, Lord Mansfield said that "neither party, witness, counsel, jury, or Judge, can be put to answer, civilly or criminally, for words spoken in office". Of that immunity it has been said in Mann v O'Neill that it responds to two related considerations, "to assist full and free access to independent courts for the impartial quelling of controversies, without fear of the consequences" and "the avoidance of the re-agitation by discontented parties of decided cases after the entry of final judgment" other than by appellate processes. That view of the matter reflects the consideration that what is at stake is the public interest in "the effective performance" of its function by the judicial branch of government. [43] The "unique and essential function" of the judicial branch is the quelling of controversies by the ascertainment of the facts and the application of the law. Once a controversy has been quelled, it is not to be relitigated. Yet relitigation of the controversy would be an inevitable and essential step in demonstrating that an advocate's negligence in the conduct of litigation had caused damage to the client. … [45] Rather, the central justification for the advocate's immunity is the principle that controversies, once resolved, are not to be reopened except in a few narrowly defined circumstances. This is a fundamental and pervading tenet of the judicial system, reflecting the role played by the judicial process in the government of society. If an exception to that tenet were to be created by abolishing that immunity, a peculiar type of relitigation would arise. There would be relitigation of a controversy (already determined) as a result of what had happened during, or in preparation for, the hearing that had been designed to quell that controversy. Moreover, it would be relitigation of a skewed and limited kind. No argument was advanced to this Court urging the abolition of judicial or witness immunity. If those immunities remain, it follows that the relitigation could not and would not examine the contribution of judge or witness to the events complained of, only the contribution of the advocate. An exception to the rule against the reopening of controversies would exist, but one of an inefficient and anomalous kind. [46] A justification based on finality has as much force today as it did when Giannarelli was decided. Given this, what changes have occurred since the decision in Giannarelli which would necessitate a reconsideration of that decision? …" 47 Even though before me, counsel does not seek to re-agitate counsel immunity, it is important to bear in mind the underlying rationale of the immunity when considering arguments on its limits and the proper application of the principles adumbrated by the High Court. 48 In the current situation, the claim for negligence must depend on damage. To show damage, the plaintiff must show that the judgment of Associate Justice Malpass would have been different if the facts would have been adduced fully or properly. In other words, the Court must by definition re-litigate, on the basis of different evidence, that which has already been litigated and determined. Moreover, even if this were permissible, it would create interesting evidentiary and litigious issues which, themselves, would create public policy concerns. For example, would it be permissible for counsel to defend the claim on the basis that Associate Justice Malpass was wrong and that, therefore, no damage was caused by the act or failure to act? If Associate Justice Malpass were negligent, which I do not suggest, could the defendants claim contribution? 49 I turn, then, to the principles to be applied in relation to this aspect of the claim.

Is the Conduct in Issue "Intimately Connected" with the Conduct of the Case in Court? 50 There are a number of cases, consistent with D'Orta and Giannarelli, that deal with the immunity. While some use different terminology the principle, however expressed, is binding and must be applied by me. While Kirby J (Boland v Yates (1999) 74 ALJR 209 at [150]) has described the "intimately connected" test as "impermissibly vague", if the conduct in question unarguably fits the verbal formulations of the test, then applying General Steels principles, I should strike out any claim based upon conduct in respect of which, on that formulation, the immunity would arise. 51 In Giannarelli, Mason CJ describes the immunity as having "no application to work done out of court which is unconnected with work done in court" (p 559). Further, Mason CJ said: "Preparation of a case out of court cannot be divorced from presentation in court. The two are inextricably interwoven so that the immunity must extend to work done out of court which leads to a decision affecting the conduct of the case in court." ( Giannarelli at 559-560) 52 To like effect is the passage in the reasoning of Brennan J in Giannarelli: "neither a barrister nor a solicitor may be sued by a client in respect of any act done or omission made in the conduct of the client's case in court or in the making of preliminary decisions affecting the way in which the case is to be conducted when it comes to a hearing." ( Giannarelli at 579) 53 All of the dicta (including the House of Lords in Saif Ali v Sydney Mitchell [1980] AC 198) supports, or is derived from, the formulation by McCarthy P in Rees v Sinclair [1974] 1 NZLR 180 at 187: "… the protection exists only where the particular work is 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." 54 The conduct of S Stanton, about which complaint is made in relation to the extension of time consists of: (in the 1998 proceedings) a failure to alert the plaintiff and Mr Rigg to the existence of relevant statute and case law; failing to advise the plaintiff and Mr Rigg to file promptly the motion seeking extension of time; and failing to advise in relation to the preparation and conduct of the application for extension. In the 2001 proceedings it is alleged that S Stanton was negligent in advising on evidence to be adduced on the extension application and in failing to seek an adjournment of the extension application to allow further evidence to be adduced. The full extent of the allegations are set out earlier, but the foregoing summary will suffice for present purposes. Those allegations that do not fit neatly into the foregoing summary do not detract from that which now follows. 55 The drafting of affidavits, the determination of the contents of those affidavits and the advices relating thereto, indeed all the tactical decisions associated with the preparation for and presentation of the extension application were, in the circumstances of this case, "intimately connected" with conduct of the case in court and affected the hearing. It is difficult to imagine out-of-court work more connected with the conduct of the case in court than the determination of the witnesses to be called and the evidence to be adduced from them. To the extent that these allegations concern out-of-court work, they are fundamentally directed to such matters or to preliminary steps leading only to such matters.

I will deal with these issues in reverse order. 68 The claim against S Stanton in the Further Amended Statement of Claim in relation to this aspect of the case is pleaded in paragraph 33(b) and particularised. That pleading and particulars are reproduced in this judgment at [27] infra. It claims, which, at least for present purposes, is accepted, that the first indication to the plaintiff or his agent (other than Mr Rigg) that there was a need for independent advice was 4 August 1998 which was too late to sue Mr Rigg, at least for failing to commence proceedings against the SRA by 1 July 1992 (see Wilson v Rigg [2002] NSWCA 246). 69 As made clear by the Court of Appeal, the 1998 proceeding nevertheless were not out of time except in relation to that failure (see Wilson v Rigg [2002] NSWCA 246 at [55], [56] and Order 3 in [59]). The 1998 Proceedings as they initially existed sued for that failure but no longer do. Paragraph 4A alleges a duty on Mr Rigg, as part of his retainer, to use reasonable care, skill and diligence. It seems to have been assumed in argument, at least by Counsel for the Plaintiff, that this was a claim founded in negligence. For my own part, it is not obvious that the claim is so confined. While it would clearly include negligence, as is pleaded in paragraph 4 of the Further Amended Statement of Claim in the 1998 Proceedings there was a contract between the Plaintiff and Mr Rigg. The 1998 Proceedings do not purport to set out the terms of that contract but it may be a matter that, between the parties, has been the subject of further and better particulars or agreement. The Court is, and usually would be, unaware of such exchanges at this stage or proceedings. However, a proper reading of the Further Amended Statement of Claim makes clear that there was a contract between Mr Rigg and the Plaintiff that went well beyond that pleaded in paragraph 4. For example, it included taking the proceedings for the extension of time. Consequently it seems that the terms of the contract is a matter which may be the subject of evidence. It would seem likely, and, at the very least, possible, that the terms included simply an instruction to do all that is necessary to obtain for the plaintiff appropriate compensation for the injuries which, of course, would include taking proceedings before 1 July 1992 against the SRA. That also accords with the continuing negotiations with the SRA even after 1 July 1992. Even if there were no substantive negotiations after July 1992, or after June 1997, it would not defy imagination for some settlement to have been reached and, if an offer of substantially all that was claimed were offered by the SRA at that time, it would not have been beyond the ordinary understanding of a retainer of this kind that Jack Rigg would be required to perform all work to bring about a settlement favourable to the plaintiff. 70 As was determined by the Court of Appeal, on 2 July 1992 the value of the plaintiff's cause of action against SRA diminished and the plaintiff suffered damage. Time expired on 2 July 1998 for suing Mr Rigg for failing to file proceedings, but the retainer still continued. If the extension of time had been successful the damage associated with the earlier breach would have been wholly mitigated (save for the question of costs and the like). If, regardless of the extension of time, a settlement had been reached with the SRA for all the damage, again the damage from the failure to file proceedings in time would have been substantially mitigated. Until such time as the contractual relationship between the Plaintiff and Mr Rigg came to an end the latter hypothetical was possible, albeit extremely unlikely. After the dismissal of the proceedings by Associate Justice Malpass, even the former hypothetical was possible, albeit remote, because further proceedings, and/or a further notice of motion seeking extension, could have been filed and successfully agitated. 71 The relevance of the above is that it may be that proceedings by the plaintiff for breach of contract against Mr Rigg, which breach included, as a particular, the failure to file proceedings before 1 July 1992, are included in the 1998 Proceedings. Notwithstanding the reluctance in some to imply into the retainer a duty substantially identical to the tortious duty (see Hawkins v Clayton (1998) 164 CLR 539 at 583 et seq, per Deane J), a retainer may well be the kind of contract that would have implied a term that the solicitor "would not, without reasonable and proper cause, conduct [himself] in a manner likely to destroy or seriously damage the relationship of confidence and trust" between solicitor and client (see Malik and Mahmud v BCCI [1998] AC 20 at 34 per Lord Nicholls and at 45 per Lord Steyn). 72 If any of the above is found to exist, it is at least arguable that the 1998 Proceedings against Mr Rigg would, even without any negligence associated with the running of the extension of time application, include all of the damage arising from the failure to file proceedings against SRA prior to 2 July 1992. On one view the cause of action for breach of contract in such regard did not arise until termination of the retainer (see by analogy, Hawkins v Clayton at 589-590, per Deane J). I do not for present purposes need to deal with these issues; nor do I need to deal with the assessment of damage in contract and whether it would include such issues. 73 The above discussion arises because Senior Counsel raises two fundamental bases for summary judgment in relation to this third aspect of the claims against S Stanton. The first is the non-existence of the cause of action and the second is the absence of damage. I shall deal with each, because each, on its own, if correct, would warrant summary judgment and I shall deal with them in reverse order.

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