Summary dismissal of proceedings at the stage that his Honour did (Grounds 5 and 6 re lawyer respondents; ground 2 re engineer respondents)
130His Honour was clearly conscious of the fact that pleadings had not closed at the time that the separate questions were being determined, since he noted that defences had not been filed to the latest version of the statement of claim. The fact that defences had not by then been filed to that pleading is not surprising since the amended statement of claim had itself only been filed on 5 August 2013 and, prior to the fixture for the hearing of the separate questions on 23 August 2013, yet a further pleading amendment had been foreshadowed.
131There is no basis for complaint by Ms Young that his Honour proceeded on the basis that the existing immunity defences should be taken as what would be raised in answer to the 5 August 2013 statement of claim. There is no suggestion that there was any uncertainty as to the intention of the respondents to invoke advocate's or witness immunity in defence to the claims nor as to the content of that defence.
132The real complaint by Ms Young is that his Honour proceeded to determine the separate questions before she had had an opportunity to file a reply and, hence, before the scope of the issues raised by the pleadings could be finally determined.
133Counsel appearing for Ms Young, Mr Newell, emphasises that it could not have been apparent from the amended statement of claim of 5 August 2013 what matters Ms Young would have raised by way of reply to the defence of advocate's immunity.
134Somewhat inconsistently with that submission, Mr Newell also points to various matters from which he maintains that Ms Young had made clear her contention that the lawyer respondents had acted mala fide and that this was a matter that might or would be raised by way of reply. In this regard, Mr Newell refers to previous pleadings (not before this Court) and to the proposed amended pleading (in respect of which leave was not granted by his Honour), which he submits raised the issue of mala fides; to statements made by him at the directions hearing on 2 August 2013; and to the letter dated 20 August 2013 from Ms Young's solicitors in which reference to mala fides was made (annexed to the affidavit of Leonardo Carlo Muriniti sworn 22 August 2013). He also places weight on the fact that, in the course of oral submissions on 23 August 2013, he stated Ms Young's position that an allegation of mala fides would be raised by way of reply. Mr Newell emphasises that the content "and purport" of the latest draft statement of claim that Ms Young had unsuccessfully sought to file showed that the scope of the conduct complained of extended to mala fides.
135Insofar as Ms Young appears to submit that the question of immunity was to be determined by reference to the proposed amended statement of claim "or other relevant pleading", that proposition is untenable. What his Honour was considering was whether the defence of advocate's or witness immunity was a complete answer to the claims made on the pleadings as they then stood (treating the filed defences as a defence to the amended statement of claim). That issue is not to be determined by reference to any earlier (superseded) version of the statement of claim, nor to any other statement of claim that Ms Young might have wished to file.
136The relevant question for the purposes of this ground of appeal is whether his Honour erred in determining the applicability of the immunity defence in advance of the filing by Ms Young of a reply. Reliance was placed by Ms Young on the dicta of Basten JA in Donnellan v Woodland at [262] to the effect that, where a defendant seeks to rely upon advocate's immunity, the principle of finality will often be most efficiently upheld by an application for summary judgment "once the pleadings are closed", his Honour there citing Bott v Carter [2012] NSWCA 89 as an example.
137In Donnellan, at [260], Basten JA, addressing a possible contention that the application of advocate's immunity could not be addressed until the precise scope of the dispute and the manner of its resolution had been determined, said:
However, the availability of the defence cannot rest upon how the parties run the proceedings. If the defence is available, that must be ascertained from the pleadings and the potential scope of the proceedings so revealed. It is not to be assessed and determined only after the hearing of the merits, with its potential to diminish confidence in the proper administration of justice. (my emphasis)
138The need (or desirability) for pleadings to have closed before any determination of the applicability of an immunity defence was thus based on the necessity to identify the potential scope of the proceedings. In the present case, the fact that a reply had not yet been filed would be of relevance only if it might have altered the potential scope of the proceedings in such a way as to lead to or permit the conclusion that the immunity was not available. The position as between the lawyer respondents and the engineer respondents differs somewhat in this regard.
139As to the lawyer respondents, unlike a case where it could not be known in advance what issues would be joined by way of reply to an advocate's immunity defence, here Mr Newell had made clear, at least by 26 August 2013, that any reply would put in issue the question whether the conduct of the lawyer respondents was mala fide. I say "at least" by that date since the position of Ms Young as to whether there would be a reply at all (let alone one alleging mala fides or fraud) seems not to have been consistent at the various directions hearings leading up to the fixing of the matter for the hearing of the separate questions. However, by the time of the application further to amend the pleading on 23 August 2013, which was heard on 26 August 2013, the position being adopted was that an allegation of mala fides was likely to be raised by way of reply to any defence relying on advocate's immunity and would have meant that the defence was not available.
140His Honour proceeded, in obiter dicta, to consider what the answer to the separate questions would have been had the allegations of breach of fiduciary duty been pleaded as proposed in the further amended statement of claim that was the subject of the leave application. His Honour did not in my view err, for the reasons I set out later, in concluding that the answers given would have been the same had there been an allegation of mala fides. Therefore, assuming that the ambit of the foreshadowed reply went no further than the allegations of mala fides raised in the proposed further amended statement of claim, and it was not suggested that this was not the case, nothing turns on any error on the part of his Honour in dealing with the separate questions before the close of pleadings.
141As to the engineer respondents, it was not at any time suggested that mala fides would be raised by way of reply to their witness immunity defence. On the present appeal it was suggested that what might have been raised in reply was a factual dispute as to the principal purpose for which the fifth respondent was retained or for which his advice would be used.
142There are two answers to Ms Young's complaint as to the stage in the proceedings at which the separate questions were determined.
143First, and this is relevant only to the position of the lawyer respondents, it is submitted (correctly in my opinion) that Ms Young could not have raised, by way of reply, the allegation that their conduct was mala fide because such an allegation would have to have formed part of her case in chief.
144Mr Newell argues that Banque Commerciale SA En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 is an example of a case where it was accepted that it would have been proper to file a reply pleading fraud (there, in answer to the limitation defence relied on by the defendant). However, in that case, there was an allegation of breach of trust to which the respective defendants had pleaded by separate defences that the action was statute-barred. The relevant limitation defence was subject to a proviso excluding an action for fraudulent breach of trust. Although a reply was filed to the defences filed by two of the defendants, alleging a fraudulent beach of trust by the bank defendant, no such reply was filed to the bank's defence. There being no pleading of fraud on the part of the bank, its limitation defence was upheld. This does not support a contention that, if Ms Young's claim against the lawyer respondents, properly understood, was for fraud or knowing breach of fiduciary duty, this claim could have been raised by way of an allegation of mala fides in her reply.
145In oral submissions, in response to the suggestion that Ms Young's complaint as to fraud was part of her cause of action (and could not properly have been pleaded in any reply), Mr Newell put it thus:
That's how the proposed amended statement of claim was drafted because that was appropriate bearing in mind it was a statement of claim, but had it been the case that a reply was to be filed to the defence, I submit that it would have been open to say no, you cannot rely on the immunity because this is what we say about the conduct. We say that it would otherwise have been a plea in anticipation of a defence as the conventional analysis.
So it's unsurprising that it can be put in the reply. There was agitation earlier this case about whether the mala fides allegation should have been in the statement of claim as I originally recorded it, and whether it's properly a matter for reply. So the point I make there is how it's pleaded in the reply may be a matter for consideration, but the point is that it is open to the plaintiff to raise that matter in her reply, and it's never been conceded that the conduct was bona fide. (my emphasis)
Generally I would submit that it is arguably not relevant to raise it until it is alleged that - I mean it doesn't become absolutely necessary to allege it until a reliance on a particular defence like the advocate's immunity or the limitation period is announced. So it's in that way that we say that the case we have made plain in a number of ways, that it is and will be our contention at the latest at the time of filing the reply, that the conduct is mala fide to defend ourselves from this allegation. (AT 17.2-23)
146It seems clear from what was said by Mr Newell at the 2 August 2013 directions hearing before the primary judge that Ms Young was seeking to raise an allegation of mala fides in such a way as not to bear the onus of establishing mala fides - by asserting that it was for the lawyer respondents, if they wished to rely upon advocate's immunity, to establish that they had acted bona fide. In effect, although Mr Newell disavowed this (AT 11.38), his submission assumes that it was for the lawyer respondents to negative mala fides. However, if what Ms Young in substance wished to contend was that the lawyer respondents had behaved fraudulently, or that their conduct was akin to fraud, then the onus of establishing fraud would be borne by her. There is no authority to which this Court was taken to suggest that, in order to rely upon a defence of advocate's immunity, the lawyer respondents would have been required to plead that they had acted in good faith or that they had not acted mala fide. Mr Newell conceded that a conscious decision had been made not to include such an allegation in the amended statement of claim (AT 13.28-32).
147As a matter of pleading, it is recognised that new claims or causes of action should not be introduced in a reply and that a reply should not contradict or be inconsistent with the plaintiff's claim (Justice Blair et al, Bullen & Leake & Jacob's Precedents of Pleadings, (17th ed 2012, Sweet & Maxwell), Vol 1 at 29; Sir Jack Jacob and Iain Goldrein, Pleadings: Principles and Practice, (1990, Sweet & Maxwell) at 162-3; the Hon Peter Young and Hugh Selby, Rose's Pleadings Without Tears in Australia, (1997, Federation Press) at 102).
148By way of example of a contradictory pleading or departure from the claim that would impermissibly be included in a reply under the then rules in the UK, Jacob and Goldrein refer to Kingston v Corker (1892) 29 LR Ir 364 for the proposition that, if a statement of claim alleges merely a negligent breach of trust, the reply must not assert that such a breach of trust was fraudulent. In Kingston v Corker, a solicitor was sued for breach of trust and, in the alternative, damages were claimed for loss sustained by negligence, misrepresentation and deceit, in relation to the alleged improper investment of funds. The plaintiff sought to raise, in reply to a limitations defence pleaded by the solicitor, an allegation that the breach of trust was fraudulent. The Vice Chancellor, the Hon. Hedges E Chatterton, held that the pleading was bad, either restating a case already made or making a new case.
149The rationale for the pleading rule, as explained by Young and Selby, is that to insert new matters by way of reply would not assist clarification or definition of the issues in the proceedings and "would inevitably lead to a proliferation of documentation which would not read logically, would delay the trial of the action, and add considerably to its expense".
150In my opinion, Ms Young could not have set up an allegation of fraud for the first time in the reply. It would have been necessary (as Ms Young unsuccessfully sought to do) to raise such a claim by way of further amendment to the statement of claim. A reply simply alleging mala fides in the conduct or omissions of which she complained, even assuming it would have been permissible from a pleading point of view, would not (for the reasons I address in relation to ground 4 of the appeal in relation to the lawyer respondents) have been sufficient to preclude reliance by the lawyer respondents on advocate's immunity. Therefore, nothing turned on the fact that the separate questions relating to advocate's immunity were heard before the foreshadowed reply was filed by Ms Young.
151Second, and this applies to all the respondents, it is clear that a forensic decision was made by Ms Young, through her Counsel, not to oppose an order for the matter to proceed on 23 August by way of the determination in advance of the separate questions (whether on the basis that pleadings had not closed or otherwise). The only initial opposition was as to the date for the hearing and that was on the basis that Ms Young might wish to file further evidence in relation to the strike-out motions, not further evidence to be relied on for the hearing of the separate questions.
152Mr Newell accepted that he had not contended before the primary judge that the pleadings should have been closed (including a reply filed) before the separate questions were determined (AT 18.49), though a reference to Basten JA's judgment in Donnellan was included in the written submissions.
153Although Mr Newell sought to qualify the consent that he accepted had been given by Ms Young to the orders made for the hearing of the separate questions, by insisting that what had been agreed was that "the question could be dealt with according to law" (see AT 17.43), the fact is that Ms Young agreed on 2 August 2013 to the determination of the separate questions in advance of the closure of the pleadings and without raising as an objection to that course of action the fact that the pleadings had not closed. It was not suggested at that stage that any further matter would be raised in reply other than that which had been identified as the allegation of mala fides that was said to have been adequately pleaded in the proposed further amended statement of claim.
154With respect to the primary judge, the preferable course in my opinion would have been for the hearing of the separate questions not to have proceeded until the pleadings had closed. There could then have been no argument that the scope of the issues in the proceedings was that which was raised by the pleadings as they were to be properly understood.
155However, the matter having proceeded by consent on the course it did, Ms Young should be bound by her forensic decision in that respect. Unsatisfactory as I accept it will in most cases be for the issue of immunity to be determined before pleadings have closed, the parties here agreed to precisely such a course. The fact that Ms Young does not like the outcome of that course is not a basis for holding that his Honour erred in proceeding with the parties' agreement to determine the separate questions at the stage of the matter at which he did.
156In reaching this conclusion, I do not ignore the admonition by Kirby J in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515 at [137]-[138]. There, his Honour, emphasising the need for restraint in determining summary judgment applications where the law is uncertain "and especially where it is in a state of development", noted that the court owes its duty to the law. Notwithstanding that the parties there had consented to the summary judgment procedure adopted, his Honour considered that the matter should not have been determined summarily.
157However, his Honour's comments must be balanced against the need to apply the case management principles mandated under the Civil Procedure Act 2005 (NSW). If it is consistent with those principles for a judge to adopt, with the consent of the parties, the course that his Honour here adopted, it is not for the party who is unhappy with the result of that course later to contend that the judge should not have so acted. Moreover, the relevant duty to the law to which Kirby J adverted is complied with in a case such as this where the hearing of separate questions involves a final determination of particular disputed issues of law.
158For completeness, I further note that any error on the part of his Honour in having proceeded with that application at the stage he did would not now lead to the answers to those questions being given in favour of Ms Young, as sought in the draft notice of appeal. All that would have followed from such a conclusion would be that the questions should have been answered, in effect, that it was inappropriate for them to be determined at that stage.
159Grounds 5 and 6 of the grounds of appeal relating to the lawyer respondents, and ground of the grounds of appeal relating to the engineer respondents, are not made out. Nor is ground 15 of the grounds of appeal relating to the lawyer respondents, insofar as it appears to encompass a complaint as to the dismissal of the claims against them before the filing of a reply alleging conduct of the kind raised in the proposed amended statement of claim for which leave was not granted.