Claim against the Solicitors
92It is pleaded that the second defendant was an employee of the first defendant, and that the first defendant is vicariously liable for the conduct of the second defendant. Later in the pleading, the first defendant is directly alleged to have undertaken certain conduct which gives rise to a cause of action.
93It is unnecessary in considering the allegations against the solicitors to differentiate between them. It is not suggested that ultimately, if the second defendant has engaged in the conduct pleaded, that the first defendant would not be liable. They are represented by the same lawyers, and no point is taken about the different allegations between them.
94The facts upon which the claims against the solicitors are based, commence in paragraph 22. In that paragraph, Ms Young pleads that in or about April 2003, she retained solicitors. From paragraph 23 to paragraph 41 inclusive, a range of facts, assertions of knowledge - both actual and constructive, imputations of motive, conclusions of fact and law are pleaded.
95It is fair to say that the pleadings in these paragraphs are dense, fact and conclusion rich, prolix and verbose. Ms Young submits however, that each of these paragraphs is essential.
96It seems that the causes of action which Ms Young seeks to rely upon against the solicitors are:
(a)a breach of retainer: paragraphs 42-43;
(b)a breach of a duty of care said to arise from the existence of the retainer: paragraphs 43-44;
(c)a breach of a fiduciary duty, said to arise by reason of the relationship of solicitor and client: paragraph 51;
(d)the tort of deceit constituted by the making of knowingly false representations with the intention of deceiving Ms Young: paragraphs 54, 57, 60, 63 and 69;
(e)contravention of the Fair Trading Act 1987 by the making of misleading and deceptive representations: paragraph 71;
(f)a conspiracy to injure Ms Young engaged in by the solicitors with the barrister: paragraph 128;
(g)a claim for restitution with respect to a sum of $20,000 paid by way of fees: paragraph 136.
97It will be convenient to consider the first three causes of action together because they arise out of the relationship of solicitor and client, and involve similar factual allegations.
98Central to the retainer, is an allegation of actual knowledge residing in the second defendant which is said to have been acquired "... by reason of information provided by [Ms Young] ...". The knowledge is pleaded to include:
(a)that the Council had acted fraudulently in considering and dealing with a development application in the period September 2001 to February 2002;
(b)that Mr and Mrs King and the Council intended to proceed by "...a falsification of the structure and function ..." of the drainage system on the property;
(c)that Mr and Mrs King had procured a fraudulent survey;
(d)that the Council had intentionally induced a false belief in Ms Young, and that the Council must have had a collateral purpose for that conduct.
It is clear that each of these facts or events are said to have occurred before the retainer with the solicitors commenced, and were part of the information provided by Ms Young to the solicitors.
99In light of these allegations, it is necessary to say something more about the Council agenda. The facts underlying the Council agenda are, in summary:
(i)Mr and Mrs King undertook unlawful building works in about 2001, which works had the effect of trespassing on Ms Young's land;
(ii)the Council although asked to intervene by Ms Young did not do so; and
(iii)from September 2001, the Council and Mr and Mrs King colluded to, in effect, place the drainage burden and expense on Ms Young, rather than on Mr and Mrs King.
100This agenda was said to be going to be advanced by nine separate steps, the end point of which was that Ms Young would be compelled to sell her house to Mr and Mrs King at a substantial discount to the proper market price.
101Properly understood, what is alleged by this agenda is that Mr and Mrs King engaged in:
(11)an unlawful agreement with one or more unidentified officers or employees of Warringah Council, to be implemented by means of the Council abrogating its statutory duties and obligations as a planning authority; and
(12)by a deliberate misleading of Ms Young, to cause a significant financial advantage to accrue to Mr and Mrs King, and thereby a significant financial loss to Ms Young.
102Neither Mr and Mrs King, nor the Council are parties to these proceedings. Of its nature, and having regard to her claims for damages, Ms Young was, necessarily, entirely ignorant of this agenda, because it involved the complete deception of her as an integral feature of the agenda's path to success.
103Curiously, the pleading alleges that by reason of the instructions provided by Ms Young to the solicitors, at the start of, or else during the course of, their retainer, the Council agenda, of which she was necessarily unaware, was actually known to the solicitors. This is not an allegation which, on the basis of the matter pleaded, is capable of being sustained.
104As well, the allegation of the Council agenda is embarrassing because it is, at least, a statement of imputed intention, accompanied by, through the mechanism of hindsight, a constructed conclusion of serious misconduct by parties who are not parties to the proceedings. The agenda is not characterised by any precision of pleading at all. It is unclear when certain events occurred, and when knowledge is said to have become available, and hence when particular results were demonstrated.
105The pleading also alleges that the solicitors were aware of the Council agenda because such knowledge ought be inferred from their course of conduct in the discharge of the retainer, which is referred to in paragraphs 43, 45, 52 and 53 of the proposed pleading. This is a pleading of actual knowledge residing in the solicitors. The use of a process of inference is the path by which the solicitors are said to have acquired the knowledge.
106Paragraph 43 is the pleading that the solicitors were negligent and in breach of their retainer. Of itself this paragraph is not capable of sustaining the inference of knowledge which is claimed.
107Paragraph 45 is a pleading which sets out what the risk of harm to Ms Young was, against which precautions ought to have been taken by the solicitors. This paragraph is seemingly, an attempt to accommodate s 5B of the Civil Liability Act 2002. By itself, it is quite incapable of giving rise to the inference of knowledge on the part of the solicitors.
108Paragraph 52 is a pleading which supports a pleading of breach of fiduciary duty. In relevant part it says:
"The breach of fiduciary duty ... is to be inferred from the circumstances in which the proceedings were settled by the second and third defendants."
109Again, this pleading, namely of conduct in 2004, is of itself not capable of being a basis of inference of knowledge in the solicitors, of the Council agenda which necessarily existed at a much earlier point in time.
110There is then added to that introduction, 19 separate facts, matters and circumstances which, although this is not clear, seem to have been events which have occurred at or about, or else largely after the settlement of the Land and Environment Court proceedings.
111Whilst it may be possible to argue that some of these facts and matters may be seen now, in light of all other circumstances, by an observer to have had the result which is said to have occurred, namely the delivery of a part of the Council agenda, it is not open to use these events or facts and matters to ground an inference of actual knowledge in the solicitors at a much earlier point in time. Perhaps what the pleader seeks to say, although this is not what is said, is that these facts are consistent with the existence of the Council agenda, and perhaps the facts constitute evidence of steps taken in pursuance of the agenda. However, these facts are not capable of proving the pleaded knowledge in the solicitors.
112It is necessary to observe that these facts, matters and circumstances are not pleaded as a basis for a finding that a reasonable person in the solicitor's position ought to have reached the belief that the Council and Mr and Mrs King had the agenda set out and, accordingly, the knowledge ought to have been held by the solicitors. Such a pleading, in effect, of constructive knowledge, is not sought to be made. It is possible, although I express no opinion on it, that such a pleading would more easily withstand the type of attack now mounted on this proposed pleading.
113However a pleading of actual knowledge is, for the reasons which I have just discussed, not capable of being sustained by these 19 facts, matters and circumstances. The pleading is embarrassing. As well, the volume and complexity of these 19 facts and matters, expressed without reference to time, constitutes prolixity of a kind sufficient to mean that the pleading is embarrassing.
114There is a further difficulty with the way in which this paragraph is pleaded. That is, that it combines an allegation a breach of duty, with a process of inference. It pleads that a breach of duty ought be inferred.
115Breaches of a duty, whether it be a fiduciary duty or one at common law or arising from a statute, are not matters which a court infers. A breach of duty is found to have existed by reason of conduct which has occurred, or else conduct which should have but did not occur. Such conduct is measured against the obligation created by the duty, and ultimately a court reaches a factual conclusion. The notion of inference of a breach is legally a nonsense. This pleading is embarrassing.
116Paragraph 53 amounts to a pleading that in the course of the management of the Land and Environment Court proceedings, the solicitors made representations to the plaintiff, the substance of which were:
(a)the Council was not a necessary party to the Land and Environment Court proceedings for the purposes of obtaining the relief sought;
(b)a feature of the retaining wall between the properties, namely the footing, might reasonably be expected to remain in place for the purposes of the resolution of the plaintiff's drainage complaint;
(c)the offers of settlement, and the conduct of the proceedings, were being undertaken on the basis that Mr and Mrs King would accept the obligation to drain and retain the plaintiff's land; and
(d)the existence of an offer of compromise made to Mr and Mrs King on 1 October 2003, and the terms of that offer.
117The making of the representations, which all seem to be oral, is said to be a fact evidencing actual knowledge in the solicitors of the Council's agenda and the other matters to which reference is made. The fundamental difficulty with this pleading, and use of it as a basis for actual knowledge is, in addition to the much later time at which these events are said to have occurred, that the representations are ones of opinion, of understanding and of fact. Some representations mix these features.
118The other difficulty is one of timing. It is wholly unclear at what point in time these later events are claimed to have given rise to the inference of actual knowledge. Nor is it pleaded when the actual knowledge existed.
119I am not satisfied that this pleading is sufficient to support the pleading of actual knowledge.
120I am not satisfied that all of these paragraphs to which specific reference is made, are sufficient to support a finding of actual knowledge.
121The complexity introduced by this factual pleading of the Council's agenda is, to be particularly seen in the pleading in paragraph 35, of the content of both the common law duty of care owed by the solicitors to Ms Young, and their contractual obligations. That pleading, which occupies about three and a half pages, includes allegations that the solicitors were obliged by reason of their duty to advise Ms Young that Mr and Mrs King were seeking to evade their obligations to drain her land, that Mr and Mrs King and the Council were "seeking to burden the plaintiff's land with a drain so as to shift the considerable expense of draining her land and the basement room to the plaintiff's land", that Mr and Mrs King did not have and were unwilling to obtain an appropriate outlet for the water they had an obligation to drain. The length and prolixity of this pleading which does not on its face seem merited clearly warrant the description of an embarrassing pleading.
122As well, it is pleaded that the absence of an easement, or any requirement to obtain an easement, contained in a development consent indicated that
"... the Kings and the Council had no intention of the plaintiff's land being drained by the Kings and there was every reason to believe that the consent was a sham for the purpose of inducing the plaintiff to give a consent to a development application which would lead to a contrivance to put a drain onto her land."
123Further advice, which it is said should have been given was that the development consent was given on a false basis, that the plaintiff should not offer to compromise the proceedings, but should rather proceed to "obtain the protection of findings by the Court" and the shape in which the settlement of any proceedings should take.
124The breach of the duties which are then pleaded is constituted by an allegation of a failure or omission to provide advice to Ms Young of the matters set out in the pleaded duty.
125These allegations are to my mind, the product of tortuous reasoning and bizarre logic. The whole paragraph in its current form is embarrassing.
126The balance of the causes of action pleaded against the solicitors depend, essentially, upon the same facts, matters and circumstances which underlie the causes of action which I have already discussed. The pleading does not adequately support these further causes of action, and for the reasons which I have given in discussing the paragraphs referrable to the earlier causes of action, these pleadings can not constitute an allowable pleading.