Arnold v Hancock & Anor

[2009] HCATrans 141

[2009] HCATrans 141

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S490 of 2008

B e t w e e n -

JASON ARNOLD

Applicant

and

JASON HANCOCK

First Respondent

JOHN HILL

Second Respondent

Application for special leave to appeal

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 JUNE 2009, AT 11.24 AM

Copyright in the High Court of Australia

MR D.T. KENNEDY, SC:  If your Honours please, I appear on behalf of the applicant with my learned friend, MR T.J. BOYD.  (instructed by Herbert Weller Solicitor)

MR G.M. WATSON, SC:  May it please the Court, I appear with MR J.C. SHELLER for the first and second respondents.  (instructed by HWL Ebsworth Lawyers)

GUMMOW J:   You need an extension of time, do you not, Mr Kennedy?

MR KENNEDY:   I am not sure.  I think that may well be so, your Honour. 

MR WATSON:   It is not opposed, your Honour.

GUMMOW J:   There is an affidavit that appears at page 244 supporting the application for extension.

MR KENNEDY:   If the Court pleases.

GUMMOW J:   Yes, you have that grant.  Yes, go on.

MR KENNEDY:   Thank you, your Honour.  This is an application for special leave to appeal against a decision in the New South Wales Court of Appeal.  In that decision the court overturned a judgment handed down by Hulme J in Supreme Court relevantly as to liability.  The applicant’s cause of action was against his solicitors for failing to provide proper and timely advice in respect of his common law rights of action against his employer in respect of injuries that he sustained in an industrial accident that occurred on 6 June 1994.  The applicant in the course of that accident sustained a serious injury to his left leg that required amputation above the knee.  He was 23 years of age at the time of the accident. 

GUMMOW J:   We are seized of all those facts but what is the special leave point?

MR KENNEDY:   The special leave points, your Honour, are these and they proceed on an assumption, your Honour, that on the evidence before the trial judge and on his findings the applicant had a good case in relation to breach of duty of care and had a good case in relation to the question of causation.  Then the special leave point arises, your Honour, in relation to the finding of the Court of Appeal at page 217 of the blue book, that in relation to the question of the court finding an implied term, that a reasonable inquiry ought to have been instituted within the time that was available which was some 17 months since the time of the accident and that it was, in a sense, whilst a serious injury that the applicant had sustained, it was a relatively straight forward case in relation to the determination of what his damages might be in relation to what he might expect to receive if he had have retained or remained on his workers compensation benefits. 

The court appeared to rely upon the decision of Astley and two decisions that he refers to at page 214 which set out the principles that are said to apply in relation to whether an implied term of reasonableness in relation to timing and reasonableness in relation to reasonable investigation and timely investigation and the court concluded that it is ‑ the import of the court’s decision seems to be that in the absence of some specific agreement between the applicant and the respondents as to the provision of advice by November 1995, that they were under no duty of care and that he was not entitled to place reliance upon that which they had told him or had not told him when they were the ones that had indicated to him that they wished to hold a conference with him in November 1995 for the purpose of considering the very issue that was to be determined. 

There was no suggestion that there was any suggestion that the respondents had said, “Well, we are not prepared to advise you” or “you cannot rely upon what we may advise or not advise” and, indeed, after the conference in November 1995 they were writing him letters saying, “Please give us your instructions, but we do not think that your common law rights are superior to your workers compensation rights”. 

GUMMOW J:   Exactly.  Now, looking at November 1995, what is your answer to what Mr Watson says at page 271, paragraph 26:

In the end, it was [your client] who caused his own loss.  The efforts of the solicitors to contact the applicant and to advise him of his rights after November 1995 were extensive and more than the circumstances required.  The applicant’s disregard for that advice remains unexplained ‑

et cetera. 

MR KENNEDY:   Your Honour, he gave evidence in relation to that, that in fact he was certainly confused.  Secondly, there was no written advice provided to him whatsoever of the import of what had been said or not been said at the time of the conference in November 1995.  He in fact said that he lost interest in the case because the solicitors seemed to be undecided about where his best rights respectively lay and they were writing him letters that really did not take the matter any further and therefore he lost interest in it and decided not to pursue the matter any further.  They were the reasons that his Honour found, that that evidence that he gave in relation to those concerns was evidence honestly given on his part. 

We say that that partly relates, with respect, to the manner in which the advice was given because we say one of the issues that arises in terms of special leave is, what are the obligations of a solicitor who is an officer of the court to provide timely advice and to provide comprehensible advice to a person such as the plaintiff or any other person who is just a lay man and does not have the sophisticated knowledge that a respondent has?  The advice that was given in the November conference was to the best piecemeal type of advice.  Nowhere was he given a sheet of paper and said, “Look, they are the heads of damages at common law and that is what you might expect to receive if you stay on your workers compensation rights”, and then he was told – and we say quite wrongly – that in fact the solicitors’ view was that they could not say that he was better off at common law or at workers compensation when in fact the evidence before the court and as found by the trial judge indicated that that just was not so. 

This was in fact quite a strong case because the expert that was called, a Mr Hooper, said that, generally speaking, common law rights are usually superior to workers compensation rights and in this case there was no real issue that he was going to succeed because it was a very straightforward case in respect of breach of duty of care as to the circumstances of the action that he would have had against the employer and that there were really no suggestion of any contributory negligence.  Therefore, in that sense, it was a straightforward case of saying, “Well, these are your likely damages you will get at common law and these are your likely damages you will get at workers compensation”.  The solicitors did not proceed in that way, in the way in which they advised him, and nor did they follow up with any written advice setting out those matters so that he could comprehend what the advice was. 

The major concern that he seemed to have was that he was – as a result of the advice and the lack of advice – because the trial judge found that in fact he had never been advised by the solicitors that, notwithstanding what moneys he might recover at common law in respect of his future prothesis, those reasonable costs would be provided for at the time of trial.  Here was a man who said, well, he did not want to run the risk of losing his medical expenses, they being the medical expenses that in fact he was getting by way of workers compensation, and that for a person with a prosthesis must have been a significant matter to him.  We say it bears fundamentally on the failure of the advice to assure him that he need have no concerns about that matter and it bears directly on the question of causation which was not dealt with by the Court of Appeal when they proceeded to deal with the causation issue. 

Your Honour, the special leave aspects that arise – and if I could take your Honours to the decision in Astley which was relied upon by the Court of Appeal. That is reported, your Honours, at [1999] HCA 6. We have sent the copy up to your Honours – to be found in paragraph 47 of the judgment. The Court relied upon that decision and, significantly, your Honour, the decision says this in part at paragraph 47:

The contract defines the relationship of the parties.  Statute, criminal law and public policy apart, there is no reason why the contract should not declare completely and exclusively what are the legal rights and obligations of the parties in relation to their contractual dealings.

The import of the Court of Appeal’s decision seems to be that in the absence of the applicant saying, “I want my advice by November 1995” and they agreeing to do so, even though they embarked upon the process of giving him advice or not giving him proper advice, that somehow or other no duty of care arises and that he has got no – he cannot rely upon what has been said or not been said, and then he cannot sue if in fact that advice be defective.  Your Honour, we say that there are significant public policy considerations that arise in relation to that matter because at a time when the courts and the parliaments are requiring people to get on and resolve matters, bring proceedings and resolve them expeditiously and efficiently, the import of the Court of Appeal’s decision seems to be to the opposite, that is, that in the absence of some specific agreement, that the solicitor can just do whatever he wants to do.  He cannot be brought to account in relation to any failure ‑ ‑ ‑

GUMMOW J:   That is an inadequate summary of Justice Basten’s very careful reasons, I think, Mr Kennedy.

MR KENNEDY:   If your Honour pleases.

GUMMOW J:   I think that is an inadequate summary of Justice Basten’s very careful reasons in the Court of Appeal.

MR KENNEDY:   If one looks at that paragraph, your Honour, that seems to be the import of it and that we say that that is a dangerous paragraph, with respect, or principle to have on the public record in relation to solicitors and to litigants in relation to what the position is as far as what they are entitled to expect in terms of the timeliness of the advice and the reasonableness of the advice and their entitlement to be able to rely upon it where there are competitive rights and in relation to even a litigant seeking advice generally in relation to civil matters. 

Your Honour, we say that there was a failure in relation to the manner in which the advice was given.  We say that there was a failure in relation to the provision of proper written advice in the circumstances and that these are matters that we say requires the intervention of this Court and

that they are reasons why special leave should be granted in the circumstances. 

We also, with respect, say, your Honour, that the decision referred to in that paragraph – it is arguable that by reason of the respondent suggesting that the conference be held, that there was a specific agreement in relation to the provision of advice by that time.  Secondly, that in the absence of the specific agreement, that there is no reason why in the circumstances of this case that the principles as to implied terms were not well and truly satisfied, as set out in the decisions that the Court of Appeal referred to in their decision.  We also say, your Honour, that if the plaintiff did have a good cause of action in the breach issue and the causation issue, that a substantial injustice has occurred as a result of the determination of the Court of Appeal. 

GUMMOW J:   We do not need to call on you, Mr Watson.

No sufficient reason has been advanced to establish error in the decision of the New South Wales Court of Appeal in this matter.  Special leave is refused with costs.

AT 11.39 AM THE MATTER WAS CONCLUDED