Wittenberg v Gillis and Ors

Supreme Court of NSW|2019-08-22|Before: Campbell J, Mr J, Griffiths J

Judgment

Mr Wittenberg's claim for damages against the defendant legal practice ("the legal practice") is one of the five related matters heard together by me of which I have first given judgment in the claim brought by Ms Lavars (Lavars v Gillis [2022] NSWSC 13] ("principal judgment")). Evidence in one case stood as evidence in the others. Like the other plaintiffs, the basis of Mr Wittenberg's claim for damages from the legal practice is its alleged negligence in providing legal advice relating to the settlement of proceedings brought separately by each of them, but heard together, in the Federal Court of Australia for the recovery of employment benefits due on termination of employment, damages for wrongful dismissal, and damages, in the alternative, for the tort of deceit, tort of negligent misstatement, or the statutory cause of action created by ss 52 and 82 Trade Practices Act 1974 (Cth) ("TPA") for deceptive or misleading conduct.

Mr Wittenberg's employment with St George Bank

After migrating from his native United States of America, Mr Wittenberg enjoyed a successful career in banking in Australia. In late 2005 or early 2006 he was "head-hunted" from his position at Societe Generale to take up a new position in the SGB Treasury as Head of Debt Capital Markets, an area in which he had developed considerable expertise. He commenced with SGB on 27 February 2006 and occupied that position for exactly 3 years, although his duties expanded during his employment including responsibility for the sales and distribution team.
Upon the commencement of his employment, Mr Wittenberg entered into a Written Service Agreement specifying his terms of employment, including an entitlement to six months' notice of the termination of his employment, or payment in lieu. He was entitled to terminate the employment on one month's notice.
The circumstances of his recruitment were such that he was promised a large bonus upon commencement and guaranteed a further bonus after a period of service. Under his service agreement, the retrenchment provisions of the SGB redundancy policy did not apply. As a term of his employment, he was entitled to participate in the Treasury Incentive Plan ("TIP") Bonus Scheme and the Medium-Term Treasury Incentive Plan ("MTIP").
As I said in my principal judgment (at [27]), in May 2008 Westpac and SGB announced their proposed merger which was completed on 1 March 2010. Following the announcement, Mr Wittenberg was one of the executives promised the Retention Incentive Payment ("RIP") if certain market performance targets were met on an Earnings Per Share basis ("EPS") (see principal judgment [28] - [30]). The Board had set a target of 10.1%; the executives concerned were informed the target was 8 - 10%; and 8.3% was achieved.
As I said (at [2] above), Mr Wittenberg was under the impression from what had been said to him by superiors that he would obtain a position with Westpac. However, contrary to this, in about November 2008, a decision had been made that a suitable position was not available for him in the merged entity and on 23 February 2009, Mr Wittenberg was told by SGB that his SGB position was redundant and that he could not be redeployed. He was paid his notice and redundancy entitlements as specified in his service agreement, calculated by reference to his base salary only. He received no pro rata bonus for the SGB corporate financial year current when his employment was terminated. Mr Wittenberg had not been seconded to Westpac during the transitional period.
His redundancy entitlements included deferred TIP bonuses for May and November 2009, each in the sum of $120,000 and a pro rata bonus under the MTIP calculated in the sum of $16,675 (Exhibit 5, p. 118).
Before his redundancy took effect, Mr Wittenberg wrote to his superiors at SGB querying the amount of his proposed payout of which he had been given an indication. He claimed that his MTIP payment should have been $88,684.93, and that his deferred bonus should have been $218,301.37, rather than $120,000. SGB's General Manager, Human Resources rejected each of these claims (Exhibit 5, pp. 135 - 137). After consultation with Mr Gillis, Mr Wittenberg instructed the former to make a claim for his unpaid entitlements. In Mr Gillis' letter to SGB's solicitors dated 16 April 2009 (Exhibit 5, pp. 142 - 145), Mr Wittenberg claimed that his actual entitlements upon redundancy totalled $759,576.84, rather than the $284,537.50 he said he had received. He offered to accept the sum of $475,000 taxed as an Eligible Termination Payment ("ETP") "to resolve all claims against [SGB]". This offer was not responded to. As I point out below (at [18]), Westpac claimed Mr Wittenberg had been paid a much larger sum.

The Federal Court proceedings

By the time Mr Wittenberg's claim came to mediation on 30 November 2011, it had been formulated as a claim for damages for past and future loss of earnings, exemplary damages and aggravated damages founded on the causes of action relating to deceit, misleading or deceptive conduct and negligent misstatement. As I have said, this arose out of the RIP circumstances.
Adopting the Schedule of Damages prepared for the mediation, his claim for damages inclusive of costs was put forward as totalling $3,730,885. The components of that claim are as follows: Past economic loss after deduction of post-retrenchment employment, salary, redundancy and notice payments after the cause of actions arose $678,450.00 Retention incentive $50,000.00 Pre-judgment interest at 8.5% on an accruing loss basis $48,830.00 Future economic loss for 9.8 years (3% discount), less 25% vicissitudes $1,403,605.00 Exemplary damages $1,000,000.00 Aggravated damages $250,000.00 Costs and disbursements $300,000.00 $3,730,885.00
In its position paper, Westpac pointed out that it had paid various employment benefits on retrenchment, totalling $539,926, about twice what Mr Wittenberg said he had received. It claimed about half of this amount represented benefits to which Mr Wittenberg was not contractually entitled on retrenchment. Westpac's solicitors set out in detail why entitlements on retrenchment were to be calculated at base salary only, clear of bonuses, rather than on a total remuneration basis. It strongly refuted the basis for the claim in deceit and related claims and pointed out that the RIP of $50,000 to which Mr Wittenberg claimed to be entitled was "more than covered by [Westpac's] existing Calderbank offer" in the sum of $75,000 (Exhibit 5, p. 391). Westpac claimed that the probabilities were that Mr Wittenberg would be ordered to pay its costs since 10 June 2010 on an indemnity basis, which "will be very substantial".

Federal Court judgments

As I have said (at [3] above), Griffiths J's principal judgment was delivered on 14 October 2014. Importantly, his Honour rejected Mr Wittenberg's damages claim based upon deceit and the related causes of action. His Honour did so largely because he did not accept Mr Wittenberg's evidence to the effect that "if he had known that the EPS target was 10.1% he would have treated that as "a joke" because such a figure was "unobtainable" when [SGB] had just revised its target downwards" (Griffiths J, [316]). It emerged in cross-examination that Mr Wittenberg had written an email on 6 August 2018 "in which he made reference to an EPS target of 10.1% and had written that 'hopefully we should be on track'" (Griffiths J, [335] - [336]).
However, Griffiths J did accept that Mr Wittenberg's participation in the TIP had contractual force (Griffiths J, [1005]). While his Honour rejected the claim for damages based upon the RIP, he acknowledged the claim in contract for payment of the incentive had been conceded by Westpac (Griffiths J, [1285]). He also accepted that Mr Wittenberg was wrongfully dismissed because he was not given reasonable notice of the termination of his employment under common law principles. His Honour held that Mr Wittenberg had been entitled to 9 months' notice under his service agreement, properly construed (Griffiths J, [1291]) rather than the eighteen months Mr Wittenberg claimed. His Honour, however, found that "pay" in the contractual documents meant base salary alone and did not "import any consideration of any bonus or other incentive" (Griffiths J, [1294]).
In his second judgment, dealing with the form of orders and outstanding questions of costs, while noticing that Mr Wittenberg was entitled to a judgment more favourable to him than the offer to compromise made and accordingly there was no issue "regarding the inapplicability of Rule 25.14(1)" (Griffiths J, [75]), His Honour considered that an allowance should be made in the costs order "for Mr Wittenberg's failed claim in deceit" and the related causes of action "for which exemplary damages were sought". For this reason, his Honour decided that Westpac should only pay 75 percent of Mr Wittenberg's costs of and incidental to the proceedings on a party and party basis (Griffiths J, [76]). His Honour made the following orders (Griffiths J, [77]):

"1. Judgment for [Mr Wittenberg] in the amount of $50,000 plus interest from 14 November 2008 to 2 April 2012 in the amount of $14,350.41. 2. Judgment for [Mr Wittenberg] in the amount of $228,337.50 plus interest from 27 February 2009 to 27 March 2015 in the amount of $105,007.89. …. 5. The respondent is to pay 75% of the applicant's costs of and incidental to the proceeding, ….." The first judgment is for the withheld RIP.

Westpac appealed, and Mr Wittenberg cross-appealed, from the orders made by Griffiths J. Westpac challenged the additional payment in lieu of notice and the order that it pay 75% of Mr Wittenberg's party and party costs. Mr Wittenberg cross-appealed from the failure of Griffiths J to uphold his full claim in lieu of notice (Buchanan J, [28]). Westpac were successful and Mr Wittenberg was unsuccessful. On 30 March 2016 the Full Court made the following orders (Affidavit David Eric Collinge sworn 3 August 2018 [20]; CB 2, tab 38A): "1. The appeal be allowed; 2. The orders made in proceedings NSD 90 of 2010 on 27 March 2015 be set aside and in lieu thereof it be ordered that: (a) Judgment for the applicant in the amount of $50,000 plus interest from 14 November 2008 to 2 April 2012 in the amount of $14,350.41; (b) Judgment for the applicant be ordered in the sum of $60,000 plus interest on that amount from 27 February 2009 to 27 March 2015 at the rates prescribed by s 51A of The Federal Court of Australia Act 1976 (Cth); (c) The respondent to pay 25 percent of the applicant's costs of the proceedings in NSD 90 of 2010 as taxed if not agreed. 3. The respondent to the appeal to pay the appellant's costs of the appeal as taxed if not agreed. 4. The cross-appeal be dismissed with costs, as taxed if not agreed." The amounts involved are set out in [22] of Mr Collinge's affidavit. It seems to have been overlooked that given Westpac's success on its appeal the judgment recovered by Mr Wittenberg was less favourable than the offer to compromise of 2 December 2011, which is central to Mr Wittenberg's first head of claim. So far as the evidence before me discloses, no application was made by Westpac that Mr Wittenberg pay its costs on an indemnity basis after the offer to compromise became effective for the purpose of Federal Court Rules 2011 (Cth).

Early developments

In my judgment in Lawson v Gillis (at [22]) I set out my approach to the resolution of disputed questions of fact dependent upon the recollection of lay witnesses. Subject, of course, to the onus and standard of proof, I explained why I have attempted to reason to my conclusions, "as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events" as mandated by the High Court of Australia in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31]. My observations there are equally applicable here.
After sending the letter of 16 April 2009 (Exhibit 5, p. 142; at [15]) on Mr Wittenberg's behalf, Mr Gillis apparently conferred with Mr Michael Cranitch SC about Mr Wittenberg's claim (Exhibit 5, p. 148). This occurred around 15 July 2009. Mr Gillis reported to Mr Wittenberg that Mr Cranitch was positive about his "claim for notice and redundancy on a total remuneration basis, pro-rata bonus and incentive bonus plus interest and costs". Mr Wittenberg was then in Los Angeles, but having received that encouragement, he emailed Mr Gillis saying, "I would agree to commence proceedings" (Exhibit 5, p. 149). A "final draft" Statement of Claim was forwarded to Mr Wittenberg for his consideration on 15 September 2009 (Exhibit 5, p. 159). Mr Wittenberg responded on 22 October 2009 saying he wished to review the final draft "before lodging" (Exhibit 5, p. 160).
No doubt at Mr Wittenberg's request, Mr Gillis provided a written advice on quantum (Exhibit 5, pp. 165 - 7) commencing with the statement: "I confirm my opinion and that of Michael Cranitch Senior Counsel is that your claim has more than reasonable prospects of success for damages for the following: …" Detailed breakdown of various heads of claim relating to the RIP, pro-rata bonus, and past and future economic loss was provided. Mr Wittenberg obviously requested something in writing from Senior Counsel because on 17 December 2009, he told Mr Gillis (Exhibit 5, p. 168) "I'm just waiting for SC to provide opinion and then I can determine lodging my pleading".
On 23 December 2009, Mr Gillis provided Mr Wittenberg with a copy of a memorandum from MJ Cranitch SC and D. O'Dowd of counsel with whom Mr Wittenberg had conferred. Mr Wittenberg apparently instructed Senior Counsel that "there is evidence available … which would indicate what he could have achieved had he been in a position to go elsewhere" when SGB offered inducements for him to stay. Mr Cranitch expressed the following opinion: "… if the evidence stands up, there will be significant evidence of his acting to his detriment by staying on with the bank … your client has a number of options available to him which can all be exercised concurrently … there is no doubt that the tried and accepted legal position is crystal clear in favour of your client, if his evidence is accepted." (My emphasis).
On 3 February 2010, not without qualification, Mr Wittenberg instructed Mr Gillis to proceed, and his Statement of Claim was filed in the Federal Court Registry on the same day (Exhibit 5, pp. 169 - 191).
From these contemporaneous documents, I have formed the impression that Mr Wittenberg had a good grasp of what he regarded as his entitlements, but while he initially seemed keen to sue, he actually proceeded somewhat cautiously requiring written advice from both Mr Gillis and senior counsel separately before making the decision to instruct Mr Gillis to commence the Federal Court proceedings.
Mediations were arranged for each of the legal practice's SGB clients who had commenced Federal Court proceedings for May 2010. Mr Wittenberg's claim was included. The mediator was the Honourable Ian Callinan AC QC. Mr Cranitch and Mr O'Dowd appeared for Mr Wittenberg.
Mr Wittenberg's affidavit sworn on 6 July 2018 (CB 2, tab 37, p. 398 ff) only refers to the mediation in passing (p. 400 [20]). It is clear, however, that he read the position paper and understood that a claim in excess of $1m was being propounded on his behalf relating to unpaid entitlements and damages for economic loss relating to the RIP misrepresentation. An email from Mr Wittenberg to Mr Gillis on 21 May 2010 amply demonstrates that Mr Wittenberg had read his position paper carefully and was suggesting changes (Exhibit 5, p. 231). Mr Gillis counselled him against making any changes. At the mediation on 26 May 2010, an offer of $600,000 inclusive of costs was made on behalf of Mr Wittenberg to which Westpac did not respond (Exhibit 5, pp. 233 - 4).
In his affidavit sworn on 3 August 2018 (CB 2, tab 38, p. 415 ff), Mr Gillis states that he attended a further conference with Mr Cranitch and Mr Wittenberg on 20 May 2010 in preparation for the mediation. During that conference Mr Cranitch advised Mr Wittenberg to the following effect (p. 429 [34]): "I think you have a good case. They have not treated you well. But I have to tell you that I have lost cases I thought I would win and I have won cases I thought I would lose. There is no certainty in litigation." The position paper, which as I have said Mr Wittenberg clearly read stated that his costs then were $37,000 (Exhibit 5, p. 223). There is no reason to reject this evidence from Mr Gillis.
At the commencement of the mediation, Mr Callinan spoke of the risks in litigation saying, "There are no certainties in litigation". He also mentioned the costs would be "very expensive" and the loser would have to pay.
Mr Wittenberg wrote a long email to Mr Gillis on 27 May 2010. He expressed the opinion that he could not see SGB or Westpac winning the retention bonus point in court. He also said, erroneously as Griffiths J's findings make clear, that the correct target number "was not stated to any employee who could potentially receive the retention bonus". Mr Wittenberg also set out a number of factors relating to his retrenchment. He complained that an opportunity was not extended to him to apply for a comparable position when it became available with Westpac in April 2009. Part of Mr Gillis's response was, "I would not have allowed you to commence your case unless I was very sure you would win" (Exhibit 5, p. 237).
Mr Wittenberg wrote to Mr Gillis again on 31 May 2010 making a number of points about the retention incentive, redundancy payments to be calculated by total remuneration, bonuses were guaranteed, not discretionary, and because of his retrenchment he had clearly suffered a loss of income and "stress related illnesses" (Exhibit 5, p. 240). Mr Gillis also suggested Mr Wittenberg should claim for workers' compensation for a stress related illness (Exhibit 5, p. 242). In an email of 4 June 2010, Mr Wittenberg recorded that Cranitch SC had advised him that his "line in the sand" number was $395,000 plus legals. Mr Wittenberg stated, "if legals are at 35K, my number is for 430K". This demonstrates that Mr Wittenberg was then aware of the amount of costs that he had incurred in the action. The email was written in response to an email from Mr Gillis informing him that the offer put at mediation was $600K plus costs (Exhibit 5, p. 244).
In the event, on Mr Wittenberg's instructions, Mr Gillis stated that he served an offer of compromise on Westpac's solicitors in the sum of $580,000 plus costs. Mr Gillis also stated that he gave Mr Wittenberg oral advice about the costs implications of an offer to compromise (Affidavit [48], CB 2, tab 38, p. 421).
By a letter dated 10 June 2010, Westpac's solicitors conveyed a Calderbank Offer in the sum of $75,000 plus costs in full and final settlement (Exhibit 5, p. 250). Westpac's solicitors explained at length why the offer should be accepted. In the course of their explanation, they stated: "In the circumstances, Westpac considers that there is no realistic prospect that a court would find that the redundancy and notice payments made to Mr Wittenberg on his termination should have been calculated with reference to both bonus and TEC."
Mr Wittenberg clearly understood the point that Westpac's solicitors were making because on 11 June 2010 he emailed Mr Gillis about a number of matters. He stated that there was "probably (a) plenty of history" of "the annual entitlement being a component of total salary". I understand his reference to the "annual entitlement" to be a reference to bonuses. Mr Wittenberg stated that this course of conduct "establishes a new contractual agreement".
On 8 July 2010 after consultation with Mr Gillis, Mr Wittenberg delivered a personal letter to Westpac's CEO about his position (Exhibit 5, p. 263). The letter set out Mr Wittenberg's grievances including: that he had been "headhunted" away from a secure position; he had been assured by SGB's senior management that bonuses were guaranteed, and this accorded with his experience after joining SGB; he was offered the RIP to stay on and had been told "that there would be a role for me"; he had never been told his employment was at risk and it was not until 23 January 2009 that he was told Westpac did not have a role for him; no one from Human Resources had assisted him with his exit from Westpac on retrenchment; the lease to his family motor vehicles were cancelled by SGB without prior notice to him; and his termination payments were calculated at base salary not taking into account his total remuneration. Mr Wittenberg said he "was extremely upset, distressed and humiliated by the way he was treated, and remains so" (Exhibit 5, p. 264).
The contemporaneous documents demonstrate that discussions continued at two levels during the second half of 2010 and no further offers were made to or by Mr Wittenberg until November 2010. Two levels were formal discussions between the respective lawyers, on the one hand, and direct discussions with Westpac Human Resources on the other. Mr Wittenberg continued to write long emails about his matter including statements about how he felt about the way he had been treated by Westpac.
In August 2010, Mr Ross Miller, an executive from Westpac Human Resources, contacted Mr Wittenberg about his letter to Westpac's CEO. Mr Miller made arrangements for face-to-face meeting (Exhibit 5, pp. 274 - 5). Nothing seems to have come of that meeting.
On 29 September 2010, Mr Wittenberg wrote to Mr Gillis in what seems to have been a state of great agitation alleging that Westpac had engaged in "deliberate, false, misleading, calculated and executed … approach" to retain the clients he had introduced when he was made head of DCM, but to "deliberately work me out of competitive status during the GFC" (Exhibit 5, p. 276).
Mr Wittenberg had further contact with Mr Miller from Westpac in October 2010. However, Mr Miller invited Mr Wittenberg to "think about your legal case as we see it". Mr Miller then set out what Westpac saw as the difficulty in Mr Wittenberg's case. This followed the criticisms made by Westpac's solicitors when conveying the Calderbank Offer (Exhibit 5, p. 281). Mr Wittenberg forwarded his proposed response to Mr Gillis for his consideration on 22 October 2010 (Exhibit 5, p. 283). It is a longish rebuttal of the points Mr Miller made, opening with the statement: "… the points that you make regarding the merits of my claim appear to be based on a fundamental misunderstanding of the basis on which those claims are made." It is clear that, notwithstanding his feelings of stress, in the latter part of 2010, Mr Wittenberg well understood his case, had definite views about his entitlements and the confidence to assert them directly in dealings with human resource executives employed by Westpac. This is hardly surprising, given his background as a successful banker. Even though I accept that subjectively Mr Wittenberg was experiencing the effects of the stress to which he was subjected as the head of a large family having been retrenched from lucrative work, these symptoms did not prevent him from functioning at a high level. During 2010 he had obtained employment with a financial institution, FIIG Securities Limited as its Managing Director - Research and Market Development. It will be recalled that Mr Gillis had mentioned the possibility of a workers' compensation claim for Mr Wittenberg's stress related illness. According to the former's affidavit (CB 2, p. 424 [71] - [73]), he obtained a medical report relating to Mr Wittenberg's condition from Dr Julian Parmegiani, a well-known psychiatric medico-legal consultant. The report is dated 5 August 2011. Dr Parmegiani expressed the opinion that Mr Wittenberg was fit to work as a managing director from the time he started working for FIIG Securities in March 2010. This opinion obviously does not suggest Mr Wittenberg's symptoms were not genuine. At the same time, however, it undermines any suggestion that Mr Wittenberg's stress related illness rendered him unable to manage his own financial affairs. It does not support a contention he was vulnerable or at some special disadvantage in making decisions about whether to continue or discontinue the Federal Court litigation.
In November 2010 the parallel approaches being pursued by Mr Gillis appeared to be on the verge of bearing fruit. On 9 November 2010, Mr Gillis emailed Mr Wittenberg and, among other topics, asked Mr Wittenberg to call as he wished to put an offer directly to Ms Cathy Graycon, Senior Human Resources Executive with Westpac with whom Mr Gillis had been having "conversations". In response Mr Wittenberg wrote (Exhibit 5, p. 287): "My calculations for an offer to Cathy only grow given the time (interest, income) and legal expenses. What are you suggesting as an offer? When I saw Ross [Miller] in August I cut through all add-ons and said I wanted: retention, bonus, interest and health. Ross informed me that I was far outside their calculations, so be it."
Although Mr Wittenberg denies this (Affidavit sworn 15 February 2019; CB 2, tab 39, p. 438 [17] - [20]), Mr Gillis states that he spoke to Mr Wittenberg on or before 17 November 2010 about making another offer and after discussion with him, received instructions to offer $1,090,000 inclusive of costs, which Mr Gillis conveyed to Westpac's solicitors on 17 November 2010 (Exhibit 5, p. 291).
In cross-examination Mr Wittenberg denied having given Mr Gillis instructions to put the offer of $1,090,000. He also said that he was not aware of the offer (698.30 - .37T).
I prefer Mr Gillis's evidence. I accept, on the balance of probabilities, that he obtained Mr Wittenberg's instructions to put the offer that was conveyed on 17 November 2010. This is more consistent with the apparent logic of the events documented in the contemporaneous emails. Both Mr Wittenberg and Mr Gillis separately were working towards an appropriate settlement of Mr Wittenberg's case. Mr Gillis wrote to Mr Wittenberg asking him to call so they could discuss an offer that could be put to Ms Graycon. Mr Wittenberg understood that because when he wrote back, he expressed doubt that Westpac would pay what he regarded as reasonable, having regard to the attitude expressed by Mr Miller. But I accept they did speak, and that Mr Wittenberg gave the instructions to put the offer that was made after discussing his case with Mr Gillis. I am not of the view that Mr Gillis would have made an offer, especially not an offer which represented a very significant increase on the offer of compromise made on 3 June 2010 without express instructions to do so.

The development of the claim for exemplary damages

In Murphy v Gillis (at [31] - [39]), I recorded my findings concerning the development of the claim in deceit and for exemplary damages. Those findings are also relevant to Mr Wittenberg's case, apart from matters which obviously relate specifically to Ms Murphy (at [31] and [34]).
In cross-examination Mr Wittenberg claimed not to know "the difference between exemplary damages, deceit, the retention bonus, the different claims [Mr Gillis] was putting in" (699.45T). I cannot accept this evidence. In his email of 9 November 2010 to Mr Wittenberg (Exhibit 5, p. 285), Mr Gillis stated that "amendments being filed tomorrow where you are claiming exemplary damages". In his email of 10 November 2010 (Exhibit 5, p. 289) Mr Wittenberg stated: "Again [Westpac's lawyers] failed to acknowledge any mistreatment. They failed to address that issue, but instead tried to tell me that I do not have any legal grounds for the Retention Incentive or Exemplary Claims." (My emphasis.) Clearly the exemplary damages issue had been raised and discussed with Mr Wittenberg before the amendment was finalised.
On 15 December 2010, Mr Gillis wrote to Mr Wittenberg asking him to call "to ensure that you are comfortable for your name to be added to claim for exemplary damages with the others". When this was put to him in cross-examination, Mr Wittenberg responded, "I don't recall that at all" (700.3T).
On 18 February 2011, Mr Gillis wrote to Mr Wittenberg (Exhibit 5, p. 303), including the following: "I had the meeting with Goot SC. He considers on the evidence there is good prospect of an award for exemplary damages. He is considering the quantum over the next few days. However, the purpose of exemplary damages is not to compensate you, but rather to punish the wrongdoer." Mr Wittenberg did not deny receiving that email (700.5 - .17T). But he did not readily acknowledge what it makes obvious, that he was well aware of the circumstances leading to the development of the claim for exemplary damages and the amendment of the Statement of Claim to include it (Exhibit 5, p. 293).

The mediation of November 2011

The legal practice's letter of 17 November 2010 (see [46] above) had conveyed offers on behalf of each of their then SGB clients. Westpac's solicitors responded by a letter dated 10 December 2010 conveying offers in fourteen cases, but as I have pointed out in other judgments, declining to make an offer "in relation to the remaining five claims". These were the claims of each of the present plaintiffs including Mr Wittenberg. Westpac's solicitors stated (Exhibit 5, p. 295): "… settlement offers by those applicants were never requested by our client. Although Westpac may at some future time be prepared to enter into settlement discussions in relation to those claims, any settlement figure must reflect the significant legal problems that attend those claims." With these offers of 10 December 2010, Westpac's solicitors sought to extract an undertaking that the legal practice would not act for any further SGB claimants (see principal judgment at [39]). When discussing this by email, obviously with the refusal to make an offer in "remaining five claims" in mind, Mr Wittenberg wrote (Exhibit 5, p. 298): "Is this another game, trick or deception to harass me, Louise, Danni, Will and Stuart? Our lives are worth more." Louise, Danni, Will and Stuart are Ms Murphy, Ms Lavars, Mr Lawson and Mr Moore.
The prospect of another round of mediations came up in about May 2011. Mr Gillis advised Mr Wittenberg that it was expected that settlement conferences could proceed without a mediator due to the inability of the parties to agree upon one. In the course of an email on 25 May 2011, Mr Gillis also stated: "We now have a well-articulated claim for exemplary damages with advice from Robert Goot of Senior Counsel that such a claim should be brought on your behalf." (Exhibit 5, p. 332)
In anticipation of settlement conferences Mr Gillis forwarded Mr Wittenberg a draft schedule of damages on 6 June 2011 (Exhibit 5, p. 337). The total claim was $2.7m and included the sum of $145,000 for costs and disbursements. Mr Gillis asked Mr Wittenberg to "call to discuss". When cross-examined about the figure for costs, Mr Wittenberg refused to accept it would have been clear to him that his costs "up until this point were $145,000 including disbursements" (700.40T - 702.5T). Mr Wittenberg failed to engage with the cross-examiner, stating "[Mr Gillis] had said Westpac would pay his costs; this wouldn't go to Court" (701.45T). For this reason, he claimed that he would not have taken any notice of the figure for costs in the schedule of damages. I reject this evidence. The schedule of damages clearly showed the figure for costs. it is equally clear that any sensible person would have noticed the figure, would have been aware that work had been ongoing in his case and would have realised that this was the amount that had to be paid to his own solicitors. In earlier emails detailing his attempts to negotiate directly with Westpac, Mr Wittenberg had made clear that "legals" was an item he expected to be included in any settlement. This is clearly a reference to his own legal costs which he appreciated he was incurring even if Mr Gillis said Westpac would pay the costs if the matter resolved.
Mr Gillis acknowledged (Affidavit sworn 19 August 2019; CB 2, tab 40, [6] and [7]) the following: "I do not dispute saying to Mr Wittenberg words to the effect of: (a) I can't see Westpac allowing your case to go trial; (b) Westpac doesn't want the proceedings to end up in the newspapers; (c) Westpac is likely to settle the case; (d) If Westpac settles, it will pay most of your costs; (e) You have strong claims; (f) Westpac will want to settle all claims to avoid the risk to their reputation. The basis upon which I made the statements set out in paragraph [6] above was that through the course of 2010 and 2011 I did believe that Mr Wittenberg and the other plaintiffs had strong grounds to pursue Westpac for their entitlements, and I also believed that the case would likely settle because Westpac would not want the case to go to hearing." I do not accept that Mr Gillis gave Mr Wittenberg or any other of the clients any guarantees in absolute terms to the effect the case would not go to court, Westpac would settle, and Westpac would pay each client's costs. Indeed, from his direct dealings with Westpac executives and his experience of the attitude of Westpac's solicitors Mr Wittenberg knew that Westpac was looking askance at his offers. The text of various emails written by him expressly contemplate the prospect of his claim proceeding to a contested hearing.
Neither settlement conference nor mediation involving Mr Wittenberg eventuated in mid-2011. Understandably, Mr Wittenberg was very invested in the process and wrote another long email to Mr Gillis on 25 August 2011 (Exhibit 5, p. 348) raising a myriad of questions about the progress of the preparation for hearing. He made the following observations, which speak volumes of his state of mind at this time and his level of frustration with Westpac: "I recognise that you have done a good job to get the majority of the Applicants settlements to date, and for that I thank you! However, as the days, months and years go by the mental, emotional, physical and financial impact on me (and possibly the other four Applicants) has been extreme. I doubt any one of us wants to be the last man standing, but that will happen to someone. All that means is that as we get closer to the pointy end of these proceedings, I require more information and confidence that we are on the right track … this has been completely exhausting and draining!" Fear of being "the last man standing" was an anxiety expressed by each of the five plaintiffs in these cases in different ways. It is clear that they drew strength from proceeding as a group and by consulting each other about developments. This affected progress of settlement negotiations at times. Each was anxious to know the attitude of the others to the offers being made. For Mr Wittenberg these frustrations continued to grow throughout 2011. He made mention in an email of 21 September 2011 (Exhibit 5, p. 357) of his belief that Westpac's solicitors were attempting to "destroy [the claimants] mentally, emotionally and physically". He stated: "Add to that our legal position - my view would be to fight in court. My view is actually to recalculate the amount of "damages" to sign against them. This is clear that [Westpac]/their lawyers are going to every extreme to stop any opportunity of career or employment for us. Given that, and I have to retire when I am 65 (most likely 60) in financial markets - 13 years at $675K per year/plus 3 percent increases/plus past awards owing/plus legals … I suggest damages in excess of 5M!"
When challenged about this email in cross-examination, Mr Wittenberg stated "I didn't want to court, I never wanted to go to court" (703.40T) and the suggestion that he should claim "in excess of $5M" "was a rant at the time" (704.5T). In late 2011, Mr Wittenberg felt strongly that he had been treated "unjustly and unfairly by Westpac" (703.13T). Given the contemporaneous emails these protestations about an aversion to court cannot be accepted at face value. No doubt Mr Wittenberg would prefer settlement to court but not on the terms Westpac had offered him.
By 24 October 2011 it had been agreed with Westpac's solicitors that mediations in the outstanding claims including Mr Wittenberg's would take place in early December (Exhibit 5, p. 361).
Mr Wittenberg was provided with a copy of his position paper, his schedule of damages and Westpac's position paper on 28 November 2011. I have summarised the content of these documents above at [17] - [18] (Exhibit 5, pp. 372 - 391). Mr Wittenberg accepts that he read those documents and was aware of their content (705.27 - .43T). He claimed not to understand his costs liability even so (705.44T). He acknowledged that he had read Westpac's assertion about him probably not bettering the Calderbank offer of 10 June 2010 and, as a consequence, that he would be liable for Westpac's very substantial costs (707.1T).
Mr Wittenberg attended a conference with Mr Goot SC, Mr O'Dowd, Mr Gillis and Mr Collinge at Mr Goot's chambers at about 2:45 p.m. on 29 November 2011. Once again, Mr Collinge kept a contemporaneous note of the conference and of the mediation on 30 November 2011. Mr Wittenberg does not mention the conference of 29 November 2011 in his affidavit of 6 July 2018 and in cross-examination said he had no recollection of the conference (709.09T). From Mr Collinge's notes, I infer that Mr Goot told Mr Wittenberg that it was clear that he had been dealt with very shabbily by Westpac. He advised Mr Wittenberg that the aim was to obtain an acceptable amount of money to compensate him for his loss and suffering and to punish the Bank for its corporate misbehaviour. Mr Goot then took Mr Wittenberg through the schedule of damages. According to Mr Gillis, Mr Goot advised Mr Wittenberg: "… you have a very good damages claim. The documents support you were misled into staying with St George by the retention incentive letter … on your evidence and those of your witnesses you could have easily obtained a job elsewhere in the market over that time. I think your damages claim has reasonable prospects of success and it is of more value than your notice and bonuses claim. Running the damages claim gets over the hurdle of your service agreement which defines your redundancy and notice benefits." From Mr Collinge's note (Exhibit 5, p. 392), Mr Wittenberg apparently observed that he felt he was being effectively blackballed in trying to get a job in the banking sector. Mr Wittenberg also expressed pessimism about the prospect of settlement saying he did not expect his claim to resolve at the mediation. He queried whether he could extract an acknowledgment of "wrongdoing" from Westpac but understood that "this is something" his lawyers "can't force [Westpac] to do" (Exhibit 5, p. 393). His pessimism about settlement demonstrates that he was not blindly accepting Mr Gillis's reassurances set out at [54] above.
Strangely, Mr Wittenberg's affidavit says little about what transpired at the mediation other than attributing certain advice to Mr Gillis, to which I will return. After Mr Goot outlined Mr Wittenberg's case in the plenary session, Westpac contended that, putting aside the RIP, Mr Wittenberg's claim was "all or nothing". It was said that the RIP was covered by the Calderbank offer.
Mr Collinge's notes are not comprehensive and there is a degree of intermingling of Mr Wittenberg's notes with the notes relating to Ms Lavars, although they can be disentangled. At about 4:10 p.m., Westpac offered $200,000 plus costs of $215,000, a total of $415,000 inclusive. It was made clear that Westpac would not countenance any recognition of the claim for exemplary damages. Discussion then ensued about a counter-offer. Mr Gillis initially suggested $2.5m. Mr Goot explained to Mr Wittenberg Westpac's apparent position in relation to the exemplary damages. After a "long discussion" (Exhibit 5, p. 399) where different views were expressed a counter-offer of $2.0m plus costs in the sum of $275,000 was put.
Mr Collinge's notes are apparently incomplete because Mr Wittenberg recalls that Westpac offered him $285,000 plus costs (Affidavit 6 July 2018; CB 2, p. 402 [31]) as a final offer. As it seems from Mr Collinge's note that Westpac were working on the basis that they would agree to $215,000 for Mr Wittenberg's party and party costs, this suggests a final offer at the mediation of $500,000 inclusive. Mr Wittenberg says that Mr Gillis advised him, "This is just the starting point. They do not want this to go to court or end up on the newspapers, so don't take the offer". On this advice he rejected the offer.
Mr Gillis states that during the course of discussions he advised Mr Wittenberg to allow $240,000 for costs and disbursements in any "inclusive of costs" discussion. He also passed on to counsel and Mr Wittenberg the statement made by Westpac's solicitor, I infer when the offer of $500,000 inclusive was put, "This is Westpac's final offer to Mr Wittenberg. If it is not accepted, we will convert the offer into an offer of compromise".
Mr Gillis also stated that Mr Goot and Mr O'Dowd gave Mr Wittenberg what might be regarded as the conventional advice given when a lawyer discusses the legal effect and costs implications of an offer of compromise with his or her client. If the result at trial was not more favourable than the offer of compromise Westpac will not have to pay party and party costs after the date of the offer and Mr Wittenberg would be liable to pay Westpac's costs from that date on an indemnity basis. Mr Gillis says that the- it must be one or other of them-Mr Goot and Mr O'Dowd advised (CB 2, tab 38, p. 426 [81]): "You can expect your own costs to complete a six weeks' hearing would be at least double what the costs are now so you should factor those amounts into your thinking in considering their final offer if you are not successful".
It is Mr Gillis's evidence that Mr Wittenberg referred to the stress he had been put through and the potential ruination of his career and rejected the offer. Mr Wittenberg said he did not have a memory of the offers made on his behalf at the mediation (711.19T). Mr Gillis's evidence was that Westpac's final offer was $465,000 inclusive of costs but given the statement of Mr Wittenberg and what was said by Westpac's solicitor when the final offer was put, I have inferred it was probably $500,000 inclusive. This is also consistent with his written advice of 13 December 2011 (at [79] below). For present purposes nothing turns on the detail.
Mr Gillis denies having told Mr Wittenberg, "Don't take the offer". However, it is apparent that none of the legal team recommended it to Mr Wittenberg.

The offer to compromise of 2 December 2011

As was expected from the comments of Westpac's solicitor, Westpac served an offer to compromise under the Federal Court Rules in Mr Wittenberg's claim on 2 December 2011 at 11:08 a.m.. The offer was in the sum of $285,000 plus costs open for acceptance for the minimum period of 14 days permitted under the Federal Court Rules. Assuming that Westpac was still prepared to agree to party and party costs in the sum of $215,000, the offer was equivalent to what I take to be its final offer at mediation i.e. $500,000 inclusive of costs. Mr Wittenberg states he was first told about the offer of compromise, by implication I infer, sometime between 9 and 13 December 2011 and expressly only when he received Mr Gillis's written advice on 13 December 2011, three days before the offer to compromise lapsed (Affidavit 6 July 2018; CB 2, p. 403 [32] - [33]; [40] - [41]).
Mr Gillis states that he telephoned Mr Wittenberg at about 3:36 p.m. on 2 December 2011 and spoke to him for 37 minutes about the offer of compromise and settlement generally. In this, Mr Gillis is corroborated by his telephone records (Exhibit 5, p. 406A). Before dealing with the content of the conversation, I should say that Mr Wittenberg had emailed Mr Gillis at 1:39 p.m. to express some "post mediation thoughts". Mr Wittenberg set out views, some of them very detailed, about the retention bonus, his employment contract, being misled about him having a job at Westpac and the way oral agreements are "honoured" in the banking sector. I have not set out all the detail. In relation to the retention bonus, he stated, "I am comfortable with all the information relating to this, and I believe this will cause [Westpac] problems". He did not mention at any time that he knew of the Board's EPS target of 10.1%. In his email he also stated the following (Exhibit 5, p. 405): "The Bank did not attend in good faith to try to reach an outcome. Do you think they want to settle or go to court? …" Having set out his points he concluded: "These points, assuming we go to court, raised in court would seriously embarrass the bank and cause economic damage. Michael, these are some of my thoughts and I would like your views. I want to be prepared for my case in court and make the bank pay for the damages that they have caused me for 3 years."
In cross-examination about his email, Mr Wittenberg sought to say that he was doing no more than reflect what Mr Gillis was telling him (712.15T - 713.21T). While his affidavit is completely silent on the fact that Mr Gillis telephoned him on 2 December 2011, Mr Wittenberg claimed to have a recollection of the conversation (713.41T), saying, "No, it was just something I remembered about the way he broke up the 285,000". But he then denied that Mr Gillis had mentioned the offer of compromise (714.4T). He accepted there was a discussion about $285,000 but said Mr Gillis did not "call" it "an offer of compromise". He then claimed to have discovered an email written to himself outlining the breakup of the $285,000 as given to him by Mr Gillis, but in that email, there was no mention of "offer of compromise" (714.30T). That "note to self" was not produced. He tried to explain that he uncovered the note to self after his July 2018 affidavit. It is not mentioned in his affidavit of 15 February 2019 (CB 2, tab 39, p. 440 [32]) where he says that he does not recall the conversation with Mr Gillis on 2 December 2011. Nor is the note to self mentioned or exhibited in his affidavit sworn on 1 August 2019 (CB 2, tab 44).
Mr Gillis states that he had a conversation to the following effect with Mr Wittenberg on 2 December 2011 at about 3:36 p.m. (CB 2, tab 38, p. 427): "Gillis: Corey, as you are aware, Westpac have now converted their last offer from the mediation into an offer of compromise. Mr Wittenberg: There's no way I am accepting that offer. Westpac has ruined my life and my career. Gillis: Corey, I still think Westpac will consider a further offer from you. What we want to do is try and put to Westpac an offer from the 8 remaining claimants which expires at 4 p.m. on the same day the first of the offers of compromise expire. On that basis, if they don't accept your offer, it is still open for you to accept the offer of compromise which will end the proceedings for you. Mr Wittenberg: There is no way I will accept the offer of compromise. The minimum I will settle for is $1,250,000 plus costs."
On the balance of probabilities, I accept that Mr Gillis's account of the conversation is much more reliable than Mr Wittenberg's. What Mr Gillis says is not only consistent with contemporaneous documents, but also accords with the apparent logic of events. Probably, as the conversation lasted some 37 minutes, Mr Gillis and Mr Wittenberg would have discussed some of the issues Mr Wittenberg raised in his email earlier that afternoon. However, the making of the offer to compromise was, as Mr Gyles SC and Ms Cameron argued, the most significant development which occurred that day. It seems incredible that an experienced solicitor who was then fully emersed in attempting to negotiate favourable settlements of the cases for his remaining SGB clients, would fail to mention the offer to compromise. The fact that Mr Wittenberg purports to remember the discussion about $285,000 and how it might be made up in its own way corroborates that Mr Gillis did discuss the offer of compromise with him. In my judgment Mr Wittenberg's recollection of these events has been skewed by his great disappointment over the outcome of the litigation and by a process of hindsight-based reconstruction.

The exchange of correspondence concerning the deceit claim in December 2011

In Murphy v Gillis at [57] - [60] and Lawson v Gillis at [43] - [44], I have set out the details of the exchange of correspondence between Westpac's solicitors and the legal practice on 5 and 7 December 2011. This correspondence concerned the claim in deceit and related claims including the claim for exemplary damages. Westpac's solicitors referred to these claims as "baseless" and notified the SGB claimants through the legal practice that an order that they pay the costs of the proceedings on an indemnity basis would be sought against them in due course on this ground. Mr Gillis joined issue with Westpac's solicitors' assertion (Exhibit 5, pp. 407 - 413).
Mr Gillis had a further telephone conversation with Mr Wittenberg on 8 December 2011 at about 8 p.m. lasting 31 minutes. The exchange of correspondence was passed on to Mr Wittenberg by email at 8:35 pm, I infer immediately after completing his call to Mr Wittenberg. On the morning of 9 December 2011, clearly having read the letters, Mr Wittenberg emailed Mr Gillis in the following terms (Exhibit 5, p. 416): "I will await your call today. I am not certain what to make of their letter. Clearly, they are admitting that the information is false and that they have not at any time tried to rectify the problems. Let me know when you want to discuss numbers. I will have my thoughts ready."
Notwithstanding the juxtaposition of this contemporaneous evidence, to which Mr Wittenberg was taken at cross-examination (715.30 - .45T), Mr Wittenberg denied that Mr Gillis discussed with him the exchange of correspondence in that 8 p.m. telephone call. I accept that that discussion took place and that Mr Wittenberg's email of 9 December 2011 was his response to what had been discussed having read the letters for himself. It seems that they had arranged to have a further discussion about "numbers", which I take to be a discussion about settlement figures. Mr Gillis attempted to call Mr Wittenberg at 12:52 p.m. and 12:54 p.m. on Friday 9 December 2011 (Exhibit 5, p. 416A).

The offer of 9 December 2011

In each of the other cases I have referred to offers made by Mr Gillis to Westpac's solicitors on behalf of each of his SGB clients on 9 December 2011. The offer made on Mr Wittenberg's behalf was $1,490,000 inclusive of costs on a damages basis (Exhibit 5, p. 418). I infer that this offer was for $1.25m plus the costs of $240,000 that Mr Gillis had mentioned to Mr Wittenberg at the mediation. On the evidence I have accepted, Mr Wittenberg instructed Mr Gillis that his "minimum" was that figure. Mr Gillis states that he "confirmed [Mr Wittenberg's] instructions" to make that offer on 9 December before conveying it under cover of his email at 4:41 p.m. that day (Exhibit 5, p. 417).
As I have already made clear, in his affidavit of 6 July 2018, Mr Wittenberg claimed not to have had an awareness of the offer of compromise when Mr Gillis made the 9 December 2011 offers. He said he did not instruct Mr Gillis to make that offer (CB 2, tab 37, p. 403 [35]). However, that definite evidence changed considerably during the course of the cross-examination (716.24T - 718.17T). Initially Mr Wittenberg said that he did not authorise Mr Gillis to make the offer (716.41T). He then said (717.5T), "I might have said, 'Fine, put it in an offer', but I don't know what offer". And then, (at 717.20T): "… I just can't recall specifically saying, "Yes, put an offer in," to him. I know that we had an email and I said, "Can we discuss numbers?" but I can't recall specifically saying, "This is the number, that's the number." Normally Michael would put in numbers, so I don't know."
When asked directly whether he may have authorised Mr Gillis to make the offer, Mr Wittenberg answered (at 717.24T): "…I just can't recall whether I gave him authority to make that offer, yes." When taken to Mr Gillis's email of 9 December 2011 at 5:35 (Exhibit 5, p. 420) confirming the offer had been made, "based on Senior Counsel's advice and as discussed with you", Mr Wittenberg acknowledged that he did not remonstrate with Mr Gillis that he had no instructions to make the offer put. This was because Mr Gillis "put forward offers to settle … none of the offers … came straight from me" (718.10T).
I do not accept that Mr Gillis acted without authority. Obviously as of December 2011 there was a mutual relationship of trust and confidence between Mr Wittenberg and Mr Gillis. Mr Gillis considered Mr Wittenberg's case to be strong and as I have said, expected the case would settle. However, having considered all of the evidence, I do not accept that he acted without instructions. He seemed to me to be careful to take instructions. Given that he regarded the case as strong, I infer that he did not think it appropriate to put any pressure on his clients, including Mr Wittenberg, to settle on the best available terms. He continued to have confidence that, with a degree of patience, ongoing negotiations would ultimately produce a better result than Westpac had been offering in December 2011. However, I am satisfied on the balance of probabilities that Mr Wittenberg did nominate what he then regarded as his "minimum" and that Mr Gillis acted on those instructions.

The written advice of 13 December 2011

On 13 December 2011 Mr Gillis gave Mr Wittenberg written advice about the offer of compromise (Exhibit 5, p. 421). The advice was in the following terms: "Please find attached an offer of compromise served by Westpac in your matter. The offer of compromise is open for acceptance by you until 16 December 2011. The offer is made on a "plus costs" as agreed or assessed basis. We estimate this order would cover at least 80 to 90 percent of your actual costs. It is essentially the same offer they put at the mediation. I am obliged to advise you the effect on (sic) the offer of compromise is that if you obtain a verdict less than Westpac have set out in the offer of compromise, you: 1. Will not recover any more of your costs incurred beyond the date of the offer; and 2. Will have to pay the costs incurred after the offer of compromise. Obviously, we do not recommend you accept the offer of compromise." I interpolate that the advice is perhaps a little deficient in as much as it does not mention indemnity costs. It is also somewhat bullish about the relationship between solicitor and client and party and party costs. But it must read in the context of the ongoing advice that was being given in December 2011. I accept that Mr Goot and Mr O'Dowd advised that if the judgment was less favourable than the expected offer of compromise, Mr Wittenberg would be liable for Westpac's costs on an indemnity basis.
There is no evidence that Mr Wittenberg responded in writing to this advice. He certainly acknowledges receiving it (Affidavit 6 July 2018; CB 2, tab 37, p. 403 [41]). He also states that he instructed Mr Gillis to reject the offer based upon previous advice including the statement that the offer was "a joke", "which I have rejected" and the recommendation contained in the written advice. Mr Gillis denies referring to Westpac's offer as a joke and I accept his evidence about that.
It is instructive, however, to consider an email exchange between Mr Wittenberg and a personal friend, Mr Neville Ide of 14 and 15 December 2011 (Exhibit 5, p. 425). The emails do not mention the offer to compromise, but on 14 December 2011, Mr Wittenberg told his friend, "Not one of the eight people settled". He added: "I believe half were miles away, so we all cut our offers to the bone, and they have until 4 p.m. Friday to accept". This is obviously a reference to the offers of 9 December 2011. The use of the plural personal pronoun "our" indicates that Mr Wittenberg was one of those who felt he had cut his offer "to the bone". This is consistent with Mr Gillis's evidence. It rather demonstrates that Mr Wittenberg did give Mr Gillis specific instructions that $1,250,000 was his "minimum", corroborating the evidence of Mr Gillis, which I have accepted.
On 15 December, while stating to his friend that he was "hoping for an outcome soon", Mr Wittenberg apparently took comfort that, "at least we have court dates in April" when the Federal Court proceedings had been set down for hearing.
In cross-examination it was clear that Mr Wittenberg understood the meaning of the expression "cut to the bone" (720.35T), but he denied that he had cut his offer to the bone (720.45T). Mr Wittenberg said he was taking advice from Mr Ide about the need to "cut down your expectations" (721.5T). But he denied that he cut his offer to the bone at $1.49m inclusive of costs. I do not accept his evidence. Rather, the contemporaneous documents speak for themselves and I accept that the offer of 9 December 2011 was Mr Wittenberg's then minimum.

The global offer

What has been described as the global offer has been referred to in other judgments (see principal judgment [78] - [91]). To recap, by letter emailed to the legal practice at 8:53 a.m. on 15 December 2011, Westpac's solicitors conveyed a further offer to each of the remaining eight SGB claimants. I would infer that these offers were counter-offers to those put by Mr Gillis in his letter of 9 December 2011. The offer is referred to as the global offer because among the conditions on which each offer was put was a condition that "all other offers are accepted by the relevant applicant" (Exhibit 5, pp. 426 - 428). This was referred to as the "one in, all in" condition, although as Mr Gray, who appeared with Mr Raftery for Mr Wittenberg, put it more accurately it was the "one out, all out" condition. The component relevant to Mr Wittenberg's claim was $850,000 inclusive of costs, 20 percent of which would be payable as an ETP and the remainder as damages. Working on the basis that Mr Wittenberg's solicitor and client costs were still around $240,000, if capable of acceptance by his unilateral act, the component referrable to him was a significant increase on the offer to compromise. Indeed, it was somewhat more than double the offer to compromise. On the other hand, it was somewhat less than half of Mr Wittenberg's "minimum" of $1.25m clear.
The global offer was open for acceptance by 4 p.m. on Monday 19 December 2011. In his affidavit of 6 July 2018 Mr Wittenberg states that he was not informed of the global offer and did not give Mr Gillis instructions to reject it or to re-put his offer of 9 December 2011 (CB 2, tab 37, pp. 404 - 5 [47] - [50]). In fact, Mr Wittenberg states that he did not speak to Mr Gillis on 15 December 2011 until about 6 p.m. when the latter telephoned him. When Mr Wittenberg asked for news of his claim, he asserts that Mr Gillis said, "There was no luck. No settlement for you today." He made no mention whatsoever of the global offer.
Mr Gillis's account is quite different. He states that he telephoned Mr Wittenberg at 8:57 a.m. on 15 December 2011 and spoke to him for 8 minutes. Mr Gillis said an exchange to the following effect occurred during that conversation (CB 2, tab 38, p. 428 [92]): "Gillis: Westpac have made an interesting offer. The difficulty of their offer that its on the basis all clients accept the offer made to them. If one client rejects the offer then there is no settlement. The offer to you is $850,000 inclusive of costs and paid as damages. Mr Wittenberg: That is an increase, but it's still not good enough. Westpac have made me unemployable. I will not accept that offer. They have my minimum I will accept." Mr Gillis's account is corroborated by his telephone records (Exhibit 5, p. 428A). It seems probable that Mr Wittenberg was at home that morning because he emailed his friend, Mr Ide at 10:43 a.m.. Admittedly he did not mention the case, only family chit-chat about plans for Christmas.
In cross-examination, Mr Wittenberg accepted he had no contemporaneous record indicating that he had spoken to Mr Gillis at 6 p.m. on 15 December (721.40T). He agreed that when he prepared his affidavit, he had no recollection of having spoken to Mr Gillis between 8:53 a.m. and 9:52 a.m. on 15 December (721.50T). When shown Mr Gillis's phone records, and it was put, "You don't dispute that conversation took place?", Mr Wittenberg's response was, "I don't recall it" (722.10T). He rejected the substance of Mr Gillis's evidence when it was put to him and denied that his recollection "is not very good" (722.15 - .25T). He agreed it would have been "extraordinary for Mr Gillis to telephone at 8:57 and… not discuss the offer". He claimed that he would not have stood in the way of the others accepting their component of the global offer (722.30T).
In my principal judgment (at [80] and [84]), I have accepted that Mr Gillis telephoned each of his clients in turn between 8:53 a.m. and 9:52 a.m. on 15 December 2011 informing each of them of the global offer, explaining the conditions to which it was subject, especially the "one in, all in" condition, and obtaining their instructions, as it happened, to reject the global offer. Notwithstanding Mr Wittenberg's adamantine evidence on this topic, I prefer the evidence of Mr Gillis supported as it is by objective contemporaneous documentary evidence. Mr Wittenberg is either simply mistaken or literally has no memory of these events due to the effluxion of time, the stress of litigation, especially the Federal Court litigation and the insidious effect of hindsight.
Mr Gillis wrote to Westpac's solicitors by email at 9:52 a.m. on 15 December 2011 rejecting the global offer (Exhibit 5, p. 429). He stated that he had obtained "all of my clients' instructions", and I accept that he had. As I stated in my principal judgment (at [86]) "there is no reason to doubt Mr Gillis's version of events about how he handled [the global offer]. He acted with celerity and having explained the position to each of the eight clients then involved, obtained individual instructions from each of them to reject the offer".
Given the strategy Mr Gillis had put in place in an attempt to achieve settlement of all matters in accordance with the individual instructions of each of his clients, it was not inappropriate for him to restate the offer of 9 December 2011 and confirm that those offers remained open in accordance with their terms even if by necessary implication the global offer operated as a rejection of those offers.
In an attempt to further the process, he also sought to make settlement more attractive for his clients by seeking to persuade Westpac's solicitors that it was appropriate that the whole amount of any settlement be paid as damages without attracting tax liability. He stated that he was instructed by, inter alia, Mr Wittenberg that an indemnity would be provided to Westpac in relation to any tax liability for paying any settlement as damages. This tends to confirm that he had spoken to his clients about furthering the negotiations. Obviously if paid as tax free damages each offer would be more attractive to the offeree. It also further corroborates Mr Gillis's evidence that he obtained Mr Wittenberg's instructions before rejecting the global offer.
And he did more, he spoke to Westpac's solicitor in an attempt to have the "one in, all in" condition removed (principal judgment at [85]), but Westpac's solicitor declined stating his instructions were, "If [Westpac] have to run one, they will run them all". In an attempt to meet Westpac's demand, which I have found was itself unreasonable (principal judgment [87]), Mr Gillis also aggregated the individual offers of 9 December 2011 into his own "global offer" of $6.48m. Given the constraints of his instructions, in my judgment, there was little else he could do.
This latter attempt elicited the second letter of 15 December from Westpac's solicitors emailed at 6:29 p.m. stating Westpac rejected Mr Gillis's version of a global offer, declining to bid against itself, but asserting that "Westpac is prepared to consider any reasonable offer that is made in the spirit of compromise". While in its terms that construct reads like an invitation to treat, and Mr Gillis accepted as much, in reality reading the letter as a whole, in substance it was a rebuke (principal judgment [87]).
The time for the acceptance of the offers of 9 December 2011, restated on 15 December, expired at 4 p.m. on 16 December without any further response from Westpac. Having taken the view that those offers had now lapsed in accordance with their terms, Mr Gillis telephoned Mr Wittenberg at 4:52 p.m. and spoke to him for 16 minutes about the offer to compromise. He described it to Mr Wittenberg as the "only offer on the table for you to accept". Mr Gillis says that Mr Wittenberg reiterated that he would not accept the offer to compromise. Mr Wittenberg initially denied such a conversation took place, but having regard to Mr Gillis's telephone records, he accepted that they must have spoken (724.1T), but he denied the substance of the conversation relayed by Mr Gillis (724.25T), while admitting that he had no recollection of the call (724.20T). I accept Mr Gillis's account.
Although with the benefit of hindsight it is now evident that December 2011 was the last opportunity for settlement of the Federal Court proceedings, that did not seem obvious to Mr Gillis or the remaining SGB claimants at the time. It is evident now that as Westpac had not been able to achieve a settlement of all outstanding claims on terms it considered appropriate, it cleared the decks for action and focused on preparation for the hearing, which was then fixed to commence in April, but was later adjourned until August 2012 (principal judgment [103] and [198]).
Mr Wittenberg remained, as is appropriate, vitally interested in his case and continued to provide information he thought helpful to its prosecution (e.g. Exhibit 5, p. 439). In an email of 26 March 2012, he sought Mr Gillis's advice as to a recalculated "new number". He stated his own calculation was "5.7M plus legals" (my emphasis)(Exhibit 5, p. 440).
As late as 9 September 2012, following a discussion with Westpac's solicitor Mr Gillis was able to indicate that "a global settlement of all applicants at this stage would be around $6.5M inclusive of costs". Given that Mr Bechelli had fallen away and the considerable costs that had been incurred since December 2011, no doubt, this must have represented a significant decrease in the expectations of each of the claimants. It indicates also that Mr Gillis continued to work attempting to achieve settlement.

The case for Mr Wittenberg

Mr Gray and Mr Raftery argued that the legal practice, principally through Mr Gillis, failed to give adequate advice regarding his prospects of success in the Federal Court litigation, failed to give adequate advice regarding prospects of settlement and failed to properly advise Mr Wittenberg of his potential costs liability in circumstances where he may be unsuccessful in the Federal Court proceedings. I understood that in this context, lack of success means not just losing, but suffering a less favourable result than offers made, particularly offers to compromise.
These failings it was submitted left Mr Wittenberg ill-equipped to properly consider and decide on the acceptance or rejection of the 2 December 2011 offer to compromise, the 15 December 2011 global offer and whether to pursue the claims in deceit and for exemplary damages relating to the RIP.
It was argued that I should accept Mr Wittenberg as a credible witness in relation to the advice he had received, in particular from Mr Gillis. Although he had some difficulty with recall, it was submitted I should accept his evidence on the crucial transactions relevant to the question of the legal liability of the legal practice. I interpolate that I have identified the factual disputes in the course of my narrative of the relevant facts in the case and resolved them along the way. Largely, for reasons I have explained, I have accepted the substance of Mr Gillis's version of events where it conflicts with Mr Wittenberg's.
The main thrust of counsel's argument is that Mr Gillis's confident, even bullish attitude conveyed to Mr Wittenberg in clear terms that he had a strong case, he would win his case, Westpac would not wish the case to go to court and would settle with him in which event it would pay a very substantial proportion of his costs. It was submitted that greater circumspection was called for. There should have been an emphasis on the real risks involved in the particular litigation, not just overall in general terms, but in respect of each individual head of claim. A detailed breakdown should have been given of Mr Wittenberg's own costs and Westpac's likely costs, lest he face an adverse order for costs.
Very detailed argument was put in relation to the question of whether the legal practice had breached fiduciary duty owed to Mr Wittenberg in relation to the global offer. It was submitted that Mr Gillis had a conflict of the duty owed to Mr Wittenberg with the duty owed to each other individual SGB claimant. This required the informed consent of each client to Mr Gillis continuing to act and he should not have rejected the global offer without it. This in all probability required the referral of each client for independent legal advice in relation to the global offer and the taking of steps to have it remain open until this could be done.
It was submitted that properly advised, Mr Wittenberg would have accepted the offer to compromise before its expiration on 16 December 2011. Alternatively, it was put, had Mr Gillis appropriately discharged his fiduciary duties, further negotiation either by him or an independent lawyer would have led to settlement on an individual basis between Mr Wittenberg and Westpac in terms of his component of the global offer or at least something better than the offer to compromise.
In relation to the deceit claim, it was argued that Mr Wittenberg should have been advised that it could not be pursued if he accepted the Retention Incentive Payment, conceded by Westpac on 21 March 2012 (see principal judgment [104]); could adversely affect his potential costs liability having regard to the letter of 5 December 2011; and in any event was hopeless and could not possibly succeed.

The case for the legal practice

Mr Gyles SC and Ms Cameron argued that the case in negligence had not been made out. Each of the claimants including Mr Wittenberg was a sophisticated litigant, experienced in matters of commerce and banking. Mr Wittenberg was a man who was used to making even quick decisions involving the assessment of financial risk. The duty of the legal practice did not require that Mr Wittenberg be led by the hand in relation to decisions about settlement. Mr Gillis did not fail in his duty to advise Mr Wittenberg and, although he was confident, it was clear that he did not cross the line in terms of usurping the client's entitlement to make decisions about settlement for himself or herself.
Contrary to his evidence, Mr Wittenberg was kept up to date about the accrual of the costs expended on his behalf at each significant milestone of the proceedings represented by the various attempts at settlement between their commencement in 2010 and the trial in 2012. In particular in 2011, he was updated about the amount of costs he would have to pay if proceedings settled. He was also advised about the legal effect and costs implications of offers to compromise including when one was served on his behalf in June 2010 and when Westpac threatened one at the mediation on 30 December 2011. He was told that Westpac's costs would be greater than his and "very substantial". So far as the global offer is concerned, it was argued that fiduciary obligation owed by the legal practice and Mr Gillis could not go beyond the terms of their retainer and the argument rises and falls with the argument in relation to breach of retainer. It was argued that there was no breach of fiduciary duty and in any event the suggestion that all eight clients should obtain separate independent advice and representation in relation to the global offer was simply unworkable.
As to causation, it was submitted that Mr Wittenberg had his own views about the appropriate figure for settlement and had he been advised to accept the offer of compromise he would have rejected that advice; assuming that he would have accepted his component of the global offer, contrary to the fact, he has not proved on the balance of probabilities that Westpac would have been prepared to waive the "one in, all in" condition in his particular case.
Senior Counsel argued that the decisions about bringing and maintaining the claim for exemplary damages are caught by advocates immunity in accordance with the principle established in Giannarelli v Wraith (1988) 165 CLR 543; [1988] HCA 52. If this is incorrect negligence has not been established. The decision to bring and maintain that claim was made in consultation with eminently experienced Senior Counsel. That the claim failed may establish that the decisions to bring it were "wrong", but not that they were negligent.

Liability in relation to the offer to compromise

As I have already said, the principles of law which I will apply are set out in my principal judgment.
The question of whether the legal practice is liable to Mr Wittenberg in relation to his rejection of the offer to compromise is to be determined by reference to the law of negligence. There is no question that the legal practice and Mr Gillis owed Mr Wittenberg a duty to exercise reasonable care to avoid exposing him to a foreseeable risk of economic loss in the provision of the professional services they had been retained to provide. As I said in my principal judgment (at [11]), "in the context of the discharge of the solicitor's duty to advise on settlement, the risk of harm is the risk that the client will suffer economic loss by failing to compromise on available terms before the hearing due to the client's claim failing…". The duty is to exercise reasonable care, not to prevent harm. Reasonable care is adjudged by reference to the standards observed by competent practitioners practising in the relevant legal field. All questions relating to breach of duty must be evaluated prospectively, that is looking forward from the time the breach is said to have occurred as though the subject harm has not befallen Mr Wittenberg and without knowledge that the risk of harm will materialise, even if it may.
It should be obvious from the findings of fact that I have already made that I have rejected Mr Wittenberg's evidence that Mr Gillis failed to notify him of offers made by Westpac and rejected offers and made counter offers without his instructions. Specifically, I have rejected Mr Wittenberg's evidence that Mr Gillis advised him to reject offers at the mediation promising that Mr Wittenberg would do much better. That is not to say that Mr Gillis recommended the acceptance of the offers made at mediation, quite the contrary. However, on the evidence I have accepted no lawyer at the mediation - not Mr Goot SC, Mr O'Dowd of Counsel, Mr Collinge or Mr Gillis - expressly recommended that Mr Wittenberg accept Westpac's best offer of $500,000 inclusive of costs.
I have accepted that Mr Gillis was confident and exuded that confidence. He considered that Mr Wittenberg had a strong case and so advised him. He also advised Mr Wittenberg that in his assessment, Westpac would rather settlement than go to court because of the potential reputational damage. He also advised Mr Wittenberg that if the case settled, Westpac would pay the majority of his costs. That Mr Gillis was confident, even somewhat bullish does not of itself equate with negligence. Given the level of introspection expressed by Mr Wittenberg in his emails, confident assertiveness was an appropriate stance for a solicitor to take to reassure the client. That in the event, Mr Gillis's confidence was proved to be misplaced does not mean he was negligent. To approach the matter in that way is to engage in impermissible hindsight reasoning. As Hayne J said in Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 at [128], if the breach inquiry is undertaken "looking back on what is known to have happened, the tort of negligence becomes separated from standards of reasonableness". As I have said, the result proves that Mr Gillis's advice was incorrect. It cannot of itself establish negligence.
The view I have formed is that despite his confidence, Mr Gillis was essentially careful. From the outset of the case, he involved experienced senior and junior counsel to advise and draft pleadings. He consulted Senior Counsel on questions of quantum and if at times his view about appropriate settlement offers varied from that of Senior Counsel, there is nothing surprising or negligent in that. The application of the art of negotiation is quintessentially something about which reasonable minds may differ.
Although counsel for Mr Wittenberg criticised the advice given in relation to prospects as "binary": "You will either win or you will lose; all litigation is uncertain", this is inaccurate. One has to evaluate the settlement advice in the overall context of the case and of the advice given throughout. Mr Wittenberg had been given written advice by Mr Gillis about prospects at an early stage, written advice had been also been obtained from Senior Counsel at an early stage and specifically from Mr Goot in the early part of 2011. Moreover, Mr Wittenberg was a client who asked frequent questions of his solicitor and there is no suggestion that those questions about the case went unanswered.
Mr Gillis did not recommend the offer to compromise of $285,000 to Mr Wittenberg because he honestly was of the opinion that Mr Wittenberg would do better. Initially Mr Wittenberg did, until Griffiths J's decision was overturned on appeal. Only hindsight suggests that Mr Gillis should have recommended the offer to compromise to Mr Wittenberg. Bearing in mind what I have said about the need to consider the advice given in December 2011 in context, had Mr Gillis, in his written advice of 13 December 2011 said to Mr Wittenberg, "You should accept this offer", Mr Wittenberg would have been extremely surprised, to say the least, given the advice he had previously received, not only from Mr Gillis, but also from senior and junior counsel earlier and at the mediation. Although Mr Wittenberg does not remember the detail, I am satisfied that prior to the mediation in conference with Senior Counsel he was advised about the detail of his claim and was provided with an assessment of his prospects in respect of the various heads of damage. This can be seen from the consideration that although his schedule of damages was well in excess of $3m, in response to Westpac's first offer at mediation he was prepared to put an offer of $2m plus costs on the advice he received.
I do not accept that he was given inadequate advice as to costs. In the context of settlement negotiations in May 2010, in anticipation of a settlement conference in June 2011 and again for the mediation on 30 December 2011, he was given albeit a global estimate of his solicitor and client costs. I am not persuaded that he did not pay attention to that figure because Mr Gillis had advised him that if the case had settled Westpac would pay his costs. That advice may have provided some confidence, but it does not follow that he would ignore the estimate provided to him by his solicitors. This is especially so when offers were put on an "inclusive of costs" basis. Obviously, he would have to have an understanding of his costs to assess, for himself, the reasonableness of the offer. Unless he knew what he would receive "in his hand", he could not assess for himself whether or not the offer was a fair one in the light of the advice he had been given.
I am not satisfied that Mr Wittenberg was given inadequate advice about his potential costs liability to Westpac if he did not beat the offer of compromise in court. I have accepted that the written advice of 13 December 2011 was somewhat deficient in that it did not mention indemnity costs, and it may have been somewhat bullish in its assessment of the proportion of his solicitor and client costs likely to be recoverable as party and party costs if his case was successful. However, he had been given clear advice about the costs implications of an offer to compromise by Mr Goot SC and Mr O'Dowd at the mediation. He had also been given accurate and correct advice about that by Mr Gillis when the offer to compromise was served on Mr Wittenberg's behalf in June 2010. The advice that was given seems to me to be entirely conventional and in the absence of expert evidence I am not persuaded that any greater specificity was required by reasonable care.
I am not satisfied that the advice given in relation to the offer of compromise was negligent. I reiterate it was not the obligation of a solicitor under the law of negligence or other professional duty to tell the client, especially a sophisticated client, who is a person of business, what to do. That is to say it is not the solicitor's duty to tell the client either to accept or reject an offer in definite or emphatic terms. Obviously, a solicitor on a given occasion may choose so to do. But generally abstaining from emphatic advice one way or the other will not be negligent: "the solicitor advises, the client decides".
I am not persuaded on the balance of probabilities that had Mr Gillis purported to tell Mr Wittenberg to accept the offer to compromise, the latter would have accepted that advice. He had already rejected an inclusive offer to the same effect at the mediation, apparently without raising any concern on the part of any member of his legal team. Moreover, I am not persuaded that $285,000 plus party and party costs is an offer he was prepared to accept whatever the advice of his lawyers. Mr Wittenberg did have his own views about his entitlements and the unfairness and injustice of his treatment by Westpac during the merger process. I accept that $1,250,000 was his "minimum" as of 9 December 2011. Even if he may have eventually accepted somewhat less, the offer to compromise was only about 25 percent of that minimum. As I have said, a sudden about-face by Mr Gillis would not have persuaded Mr Wittenberg to accept the offer. Rather it would have unsettled and concerned him probably fracturing, if not rupturing, the mutual confidence so essential to the solicitor and client relationship. I am not satisfied that Mr Wittenberg has proved causation, even were I wrong in my assessment of negligence.

Resolution of the claim in relation to the global offer

Breach of fiduciary duty

I have dealt with this issue in each of my other judgments. In particular, I have considered the question in my principal judgment (at [152] - [158]). Mr Wittenberg's claim for equitable compensation for breach of fiduciary obligation owed by the legal practice is really resolved on the same basis as the claims of the other plaintiffs.
The essence of the claim in breach of fiduciary duty was a "conflict of duty and duty" among Mr Gillis's SGB clients. In my principal judgment (at [157]), I said, "To say that some of the eight clients may have wished to accept the offer so far as it concerned them and others to reject it, is not the same thing as saying that their 'interests are in opposition' to one another". The eight remaining clients had separate and unrelated interests in their personal causes of action against Westpac. There was no actual conflict between the duties owed by Mr Gillis to each client. Although, as I said in my principal judgment (at [158]), the global offer cut across the careful strategy that Mr Gillis had implemented by the offers of 9 December 2011, I do not accept that there was any question of him acting both for and against any individual client when he dealt with the global offer. In my judgment he was able to discharge his duty to advance the interests of each client in relation to the global without impediment of his duty to advance the interests of the others. In my assessment, he continued to strive to advance the interests of each individual client in negotiating with Westpac to achieve a satisfactory result from the individual's standpoint. I accept Mr Gillis's evidence that each client instructed him to reject the global offer so far as it concerned him or her on the morning of 15 December 2011.
For the reasons I sought to fully explain in the principal judgment (at [160]) the suggestion that the law of fiduciary duty required Mr Gillis to advise each of the eight clients to instruct separate solicitors to obtain independent advice about, and perhaps separate representation in relation to, the global offer was in truth completely unworkable. It provided no practical solution to any putative breach of fiduciary duty.
As I said in Murphy v Gillis (at [114]), I am not of the view that convening a meeting of the eight remaining clients to work through the issues about the global offer was itself either necessary or workable. There was nothing in any event to work through in circumstances where each had independently rejected his or her component of the offer. Mr Gillis in any event sought to have the "one in, all in" condition removed and to encourage Westpac through its solicitors to consider making offers on the damages, rather than the ETP, basis to make the offers more attractive either generally or to those who may have been inclined to accept their component if it could be improved somewhat. Neither effort proved successful. and notwithstanding his reiteration of the 9 December offers as a global sum, elicited no further offers from Westpac.
I am not satisfied that there was any breach of fiduciary duty. Were I wrong about this, I am not satisfied that any breach caused any loss which would sound in equitable compensation. Each client, including Mr Wittenberg, had instructed Mr Gillis to reject his or her component, even if it represented an improvement on his or her offer to compromise. Only hindsight supports the conclusion that Mr Wittenberg would have been prepared to accept his component. Moreover, Mr Gillis did attempt to have the "one in, all in" condition waived. Westpac, through its solicitors, refused to countenance this. One can understand the commercial advantage from Westpac's point of view of increasing its offers if all outstanding claims could be wrapped up at once. The facts suggest that Westpac had determined if it had to run one claim, it would run them all.

Negligence in relation to the global offer

For the reasons explained in my principal judgment at [164] - [169], while I accept a solicitor may be negligent in failing to inform a client of a relevant conflict or by failing to manage a conflict appropriately, I do not accept that either occurred here. As in other cases, I do not regard Mr Gillis as having acted unreasonably in dealing with the global offer with the degree of celerity he brought to bear. I will repeat what I said in Murphy v Gillis (at [117]). This was not the first time that Mr Gillis had spoken to Mr Wittenberg or any other client about settlement. The global offer emerged during an intensive process of advice, instruction and negotiation over the previous period of approximately 2 weeks. Not everything said about settlement had to be repeated. Each of the clients, including Mr Wittenberg, was a banking executive and financially savvy. In any event, I am satisfied on the facts as I find them to be that Mr Wittenberg rejected his component of the global offer out of hand.
It must be borne in mind that the global offer was not capable of unilateral acceptance by Mr Wittenberg, and Westpac on the probabilities were not prepared to waive the "one in, all in" condition which was important to it. However, had his component of the global offer been capable of unilateral acceptance by Mr Wittenberg, he would still have rejected it. In December 2011 his "minimum" was $1.49m inclusive of costs. His component of the global offer was a long way short of that. As I have said, in putting his offer of 9 December 2011, he had "cut his offers to the bone", as he told Mr Ide. He was not then prepared to accept $850,000, inclusive of costs.

The institution and maintenance of the claim for deceit and exemplary damages

I have set out my view that the decisions made to bring and maintain the claim for deceit, related claims and consequential exemplary damages are covered by a legal practitioner's immunity from suit in Murphy v Gillis (at [118] - [121]). I repeat that reasoning as though it were reproduced here with some adaptation to allow for differing circumstances. First, I accept the event proves the unwisdom of bringing a claim based on fraud, but this is hindsight. Secondly, while Mr Wittenberg's schedule for the 30 November 2011 mediation was formulated as a claim for damages, the claim for exemplary damages played no part in settlement negotiations either at the mediation or subsequently. It was made clear, and the various claimants seemed to have accepted, that Westpac would make no allowance for any aspect of the claim based upon fraud. If it had any part to play, it was only by reference to the nebulous idea of a "settlement lever". From these considerations, I infer that the claim in deceit and its associated terms for exemplary damages played no part in the "giving of advice either to cease or continue litigating" in December 2011: Kendirjian v Lepore (2017) 259 CLR 275; [2017] HCA 13 at [32]. Thirdly, while not germane to questions of liability, the loss caused to Mr Wittenberg by maintaining the claim was somewhat limited even if more extensive than that suffered by Ms Murphy and Mr Lawson. In Mr Wittenberg's case the Full Federal Court deprived him of 75 percent of the party and party costs he otherwise would have recovered increasing the deduction of 25 percent only made by Griffiths J. Mr Wittenberg was not ordered to pay Westpac's costs on any basis. Had that consideration been otherwise, it would have been because of his rejection of the offer of compromise of 2 December 2011 as occurred in other cases. For the reasons set out at Murphy v Gillis (at [121]), the various decisions made to institute and maintain these claims was and were "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 the cause is to be conducted when it comes to a hearing" Giannarelli v Wraith at 559 - 560. Accordingly, advocates immunity applies.

Negligence in bringing the claim

I have dealt with the question of negligence in bringing and maintaining the claim for exemplary damages in Murphy v Gillis (at [122]). The same considerations apply here. On the evidence I have accepted, far from being bullish or wrongheaded about this aspect of the claim brought on behalf of Mr Wittenberg, Mr Gillis proceeded with appropriate caution. No step was taken without the express approval of Senior Counsel, indeed, in all five Silks considered there was an appropriate basis in the evidence to claim exemplary damages: Mr Cranitch SC; Mr Goot SC; by implication Mr Neil SC; Mr Gleeson SC; and Mr Sullivan QC. That the claim was rejected as being without foundation, only serves to prove so far as it reflects upon Mr Gillis and the legal practice that the decisions were wrong, not that they were negligently formed: Studer v Boettcher [2000] NSWCA 263 at [54], Handley JA; my principal judgment (at [17] - [19]).
I am not of the view that the evidence of Westpac's concession of Mr Wittenberg's entitlement to the RIP on 21 March 2012 constitutes an election itself disentitling him to bring the claim for damages arising out of those circumstances. The concession was the unilateral act of Westpac. The legal practice unsuccessfully resisted the entry of judgment in advance of the determination of the damages claim. They did not lead Mr Wittenberg unwittingly into making a deliberate choice between inconsistent remedies with knowledge of the difference.
It should be remembered that Mr Wittenberg knew of the true EPS set by the Board. Perhaps because he had forgotten that detail, this most pertinent circumstance did not emerge until he was cross-examined at the hearing of the Federal Court proceedings at first instance. He had, of course, formed the very strong view that he had been treated unfairly by Westpac and this may have clouded his recollection. But that he knew the truth of the matter said to have been misrepresented meant that he could not establish reliance an essential element of causation. It also follows that he could not on that ground establish causation of loss for the purpose of the case at hand.

Contributory negligence

The legal practice relies upon contributory negligence in reduction of the damages otherwise payable if it is found to be negligent. The particulars are largely generic: none of the plaintiffs, including Mr Wittenberg, ever instructed Mr Gillis to accept or make an offer in the amounts offered to them by Westpac; Mr Wittenberg had a figure in mind at the relevant time and refused to go lower; and none of the plaintiffs, including Mr Wittenberg ever told Mr Gillis that they could not afford to pursue the litigation from their financial or health perspective. Indeed, it is submitted that Mr Wittenberg, by his email correspondence indicated he was keen to pursue Westpac; and none of the plaintiffs, including Mr Wittenberg ever instructed Mr Gillis to make any further offers after December 2011. It is not said that Mr Wittenberg was contributorily negligent by failing to instruct Mr Gillis that he was aware of the Board's EPS target of 10.1% at least by 6 August 2008, although that matter may have been capable of so sounding. As it is not raised, I will put it to one side.
Even accepting, as I do, that Mr Wittenberg was an experienced banker and financially savvy, it is difficult to find that he failed to exercise reasonable care for his own safety by instructing Mr Gillis to accept either the offer to compromise or his component of the global offer. This is particularly so in circumstances where in effect the legal practice, through Mr Gillis, recommended that Mr Wittenberg not accept the offer of compromise and that he was not able to accept the global offer. It must be borne in mind that Mr Gillis was hoping to do better for Mr Wittenberg than either the offer to compromise or his component of the global offer by continuing the process of negotiation. At least so far as contributory negligence consists of the omission to give instructions to accept either offer, I am not persuaded it has been established by the legal practice in circumstances where, viewed objectively, Mr Wittenberg accepted Mr Gillis's advice even if he was entitled to take a different view. I am not of the view that Mr Wittenberg was contributorily negligent by failing to instruct Mr Gillis to discontinue the proceedings on his behalf due to the financial risks and his health problems. Mr Wittenberg blamed Westpac for his straightened financial circumstances and his stress related illnesses. He was bringing the proceedings to seek redress in respect of both. No one advised him to "walk away", although doubtless Westpac would have permitted that, at least by December 2011. I am not satisfied that the failure to give positive instructions to attempt to further negotiate constitutes contributory negligence. I am of the view that Mr Gillis and Mr Wittenberg would have welcomed an opportunity to negotiate further in 2012. It simply never arose.
I am not satisfied that the legal practice has established contributory negligence.

Conclusions on liability

For the reasons I have given, I am not satisfied that Mr Wittenberg has made good any of his claims and judgment must be entered for the legal practice. It is, however, necessary for me to make contingent findings on quantum lest my decision is wrong.

Contingent findings on quantum

I repeat what I have said in other judgments that the parties agreed that after publication of my reasons they should have the opportunity of either bringing short minutes or making further submissions on the quantum issues. Given my liability decision, those steps are unnecessary. However, lest I am wrong in this assessment, I will allow liberty to apply. As I have said in other judgments, I have set out my views as to the preferred approach to the assessment of economic loss in these matters in my principal judgment (at [203] - [217]). I will follow that approach here. Once again, I wish to acknowledge that counsel on both sides of the record have provided very detailed written submissions in relation to quantum, which I have found extremely useful. Mr Gray and Mr Raftery also provided tables demonstrating the differences in approach of each side to each case. Counsel have also worked together to agree upon the amount of the various components which inform the final figure. They are not agreed as to how the figures should be utilised in assessing damages. But they should be commended for their efforts.
As with the other cases, I only propose to calculate the quantum I would have awarded had Mr Wittenberg been successful on his claim relating to non-acceptance of the offer to compromise. This is for the reasons I have rehearsed in my principal judgment (at [214] and [218]). This is essentially because I do not regard the global offer as an offer made to Mr Lawson which was capable of acceptance by him alone. At best, it may have provided an opportunity for further negotiations, about which I am doubtful for reasons I have already addressed. In particular, I have had regard to Westpac's failure to engage in any further negotiations whatsoever with any remaining SGB claimant after the global offer was made with a possible sole exception in the case of Mr Bechelli.
Lest I am wrong in this approach, as in other cases, I would have considered that the assessment of any loss of a valuable opportunity to achieve a settlement when the global offer was made, presumably in excess of the offer to compromise, would involve a Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 ("Sellars") discount of 40 percent, to have regard to the inherently imponderable factors that necessarily inform the assessment of the purely hypothetical. These imponderables of course include questions of the figure Mr Wittenberg would be prepared to accept and whether Westpac would have been prepared to offer it.
The offer to compromise falls into a different category: it was made; it was available for acceptance by Mr Wittenberg alone; and had he accepted it, it would have brought the Federal Court proceedings to an end in terms more favourable to him than the actual outcome of Westpac's appeal. The offer of compromise was certain, the assessment of damages founded on it requires no deduction or discount to have regard to uncertainties.
According to the schedule prepared by Mr Gray and Mr Raftery, the total loss suffered by Mr Wittenberg by his failure to accept the offer of compromise is $198,725.59. This figure does not include any allowance for the legal practice's assessed costs and disbursements on a solicitor/client basis otherwise due from Mr Wittenberg after accounting for recoverable party and party costs and amounts already paid by Mr Wittenberg for work done after 16 December 2011 when the offer of compromise lapsed. Both sides accept that for technical reasons that figure may not be included in the damages. Mr Gray and Mr Raftery argue that a declaration should have been made that the legal practice is not entitled to recover those "wasted costs".
Unlike Ms Lavars, Ms Murphy, Mr Moore and Mr Lawson, Mr Wittenberg has not entered into any arrangement with Westpac in relation to the payment of its legal costs. However, there is a significant difference between counsel as to the amount of costs payable to Westpac which is significant to the outcome. Mr Gray and Mr Raftery contend that the costs payable to Westpac boil down to a relatively modest amount of $38,450. Mr Giles and Ms Cameron argue on the basis of the evidence in Mr Collinge's supplementary affidavit that the net liability of Westpac to Mr Wittenberg for costs is $238,509.18. It should therefore appear on the credit side of the ledger. I bear in mind that Mr Wittenberg was not ordered to pay any portion of Westpac's costs of the trial. After the appeal he recovered the modest amount of 25 percent of his party and party costs of the trial. But he was ordered to pay Westpac's costs of its appeal and his cross-appeal.
If Mr Giles and Ms Cameron are correct about the figure of $238,509.18 payable to Mr Wittenberg, they contend that Mr Wittenberg has suffered no actual economic loss. Rather, they submit that he is "better off" to the tune of $130,018.27.
This is obviously a situation where I would have permitted the parties to call further evidence and further address me on the quantum issues had I found in favour of Mr Wittenberg. Provisionally it would seem to me that the costs payable to Mr Wittenberg by Westpac would go to the legal practice in reduction of Mr Wittenberg's putative liability to it for the large margin of solicitor and client costs over 25 percent of his party and party costs.
It should be borne in mind that the legal practice's submissions on quantum and Mr Wittenberg's submissions in reply were received on an extended timetable quite some months after the conclusion of the oral hearing and I did not have the benefit of counsel's oral argument in relation to them.
Naturally suspicious as I confess to be about a proposition that a litigant who has failed to better an offer to compromise in long running first instance proceedings, leading to an unsuccessful appeal is actually better off for what is effectively a loss, I propose to adopt the figures of Mr Gray and Mr Raftery for present purposes.
I have in my principal judgment expressed a doubt as to whether the costs of the unsuccessful appeal pursued by the disappointed SGB employees before the Full Court are recoverable. However, Mr Wittenberg falls into a different category. He did better than the offer of compromise at first instance and was required to defend Westpac's appeal. Westpac's costs of that successful appeal ought to be regarded as part of the cost of mitigation of his damage. The costs of his unsuccessful cross-appeal, in my view fall into a different category, but as the legal practice has not taken this point, I will say nothing more about it.
It will be recalled that the offer of compromise was in the sum of $285,000. This is the starting point. It should also be borne in mind that Westpac would have paid party and party costs. At that time, Mr Gillis advised Mr Wittenberg that his solicitor and client costs were $240,000 and from the evidence I have accepted, largely Mr Collinge's note of the mediation and the inference available from the course of negotiation, I am satisfied that Westpac were prepared to pay $215,000 as party and party costs at that time. The difference of $35,000 should be deducted as that sum would have been required to be paid by Mr Wittenberg from the proceeds of the settlement. I am not of the view that he would have preferred to require his legal costs or party and party costs to be taxed or assessed. This leaves a net figure of $250,000. According to the calculations of Mr Gray and Mr Raftery the proceeds of the judgment substituted in the Full Court is $151,937.41. The difference is $98,062. Doing the best I can on the limited evidence available to me, to this needs to be added the costs paid to the legal practice by Mr Wittenberg after 16 December 2011 of $57,213 and the costs payable to Westpac of $38,450. These figures total $95,663. The total is then $193,725, which I would have allowed as damages without reduction. I would also have made the declaration sought by Mr Wittenberg in relation to the balance of his solicitor and client costs after 16 December 2011.

Orders

My orders are: 1. Judgment for each defendant against the plaintiff; 2. The plaintiff to pay the defendants' costs; 3. Liberty to apply on a date to be arranged with my associate.

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. Decision last updated: 25 March 2022

Trade Practices Act 1974(Cth)

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Judgment (26 paragraphs)

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Cases Cited (18)