Attwells & Anor v Jackson Lalic Lawyers Pty Limited

[2016] HCATrans 48

[2016] HCATrans 048

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S161 of 2015

B e t w e e n -

GREGORY IAN ATTWELLS

First Appellant

NOEL BRUCE ATTWELLS

Second Appellant

and

JACKSON LALIC LAWYERS PTY LIMITED

Respondent

FRENCH CJ
KIEFEL J
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 8 MARCH 2016, AT 10.13 AM

Copyright in the High Court of Australia

MR G.O’L. REYNOLDS, SC:   May it please the Court, I appear for the appellant with my learned friends, MS R.C.A. HIGGINS, MR R.A. YEZERSKI and MR D.W. ROBERTSON.  (instructed by L.C. Muriniti & Associates)

MR A.S. BELL, SC:   May it please the Court, I appear with my learned friend, MR P.D. HERZFELD, for the respondent.  (instructed by Sparke Helmore Lawyers)

MR R.P.L. LANCASTER, SC:   May it please the Court, I appear with MR N.J. OWENS for the Law Society of New South Wales, which seeks leave to appear as amicus curiae.  (instructed by Allens)

FRENCH CJ:   Mr Lancaster, I think your attention has been directed to the form of order that was made in Levy in relation to intervention.  Do you have any instructions in relation to that?

MR LANCASTER:   I do, your Honour.  In the event that such a term is required by the Court, the Law Society accepts it – that is, the application will be pursued, but at a convenient time I would wish to say one or two sentences about the different circumstances in Levy if the Court would hear that argument.  The underlying instruction is the application will be pursued if there is to be such a term.

FRENCH CJ:   Yes, well, you had better address us now on whether, if leave is to be granted, it should be granted on such a term.

MR LANCASTER:   The distinguishing feature between the Law Society’s application and the circumstances in Levy is as follows, as we see it.  Firstly, there are a number of interveners in Levy, each of which was a commercial party in the true sense of the word – Fairfax and The Seven Network and newspaper publishers, each of whom had a direct commercial interest in the scope of the freedom of communication about political matters. 

The intervention, as the judgment in 189 CLR 579 at 585 indicates, the case was adjourned and a resumed hearing undertaken in this Court for the explicit purpose of allowing such interveners to come forward and to make such submissions as they were instructed to make. So there was a real question as to costs in that case in the sense that there had been an adjournment and a resumption of the hearing in this Court and that they were commercial parties protecting their direct interests.

We would respectfully submit that the Law Society is in a different position in this case.  Whether one regards the distinction between amicus

and intervener as one that is not really defined by a clear line, putting that issue to one side, the Law Society of course is here in its capacity as a representative professional association for the solicitors of New South Wales.  It has had imposed by statute various regulatory functions of which the Court would be aware and so it is in quite a different position, in my respectful submission, to the interveners in Levy and for that reason we contend that the appropriate order would be to allow leave to appear as amicus but require no term as to payment of the other parties’ costs occasioned by the appearance.

FRENCH CJ:   Yes, thank you, Mr Lancaster.  Mr Lancaster, the Court is of the view that your client should have leave to intervene on the basis that it bears the cost of the parties occasioned by the intervention.

MR LANCASTER:   May it please the Court.

FRENCH CJ:   Thank you.  Yes, Mr Reynolds.

MR REYNOLDS:   Your Honours, as I understand it, have received a written outline.

FRENCH CJ:   Yes.

MR REYNOLDS:   Your Honours will have seen from the submissions and from that outline there are two main issues in this appeal.  The first is whether the immunity – I will call it advocate’s immunity – applies to the circumstances of this case.  The second is the issue or the potential issue as to the abolition of the immunity and argument being presented on that issue.  Can I deal with the issues in that order?  A convenient starting point is the decision in D’Orta‑Ekenaike (2005) 223 CLR 1, which I will refer to, if I may, as the D’Orta Case. 

FRENCH CJ:   Just before we get to the decision, Mr Reynolds, can we just clarify the nature of the process before the primary judge which was the subject of appeal to the Court of Appeal.  Although there was a document called, I think, a statement of “Proposed Agreed Facts” before the primary judge, is it correct to say that in truth the matter was approached on the basis that the question was whether the immunity defence was a complete answer to all the allegations in the statement of claim?  There were no agreed facts, as such, were there?

MR REYNOLDS:   Yes, there were.  This is dealt with by the Chief Justice at paragraph 26 of his reasons on page 90 of the appeal book where he repels the suggestion that this was a case of a notional demurrer which is, I think, what your Honour the Chief Justice is putting.

FRENCH CJ:   Yes.  I am just wondering about the status of the agreed facts.

MR REYNOLDS:   He says there – and there is no notice of contention on this – that these facts were – there is a separate question on agreed facts.  So effectively your Honours can delete the word “Proposed” where it appears on the top of page 32 of the appeal book.

KIEFEL J:   The agreed facts, so‑called, appear to be excerpts from the amended statement of claim and no more.

MR REYNOLDS:   They take many paragraphs, and others, from the statement of claim and also additional ones and translate them into facts, rather than averments in a statement of claim. 

KIEFEL J:   Well, they are still allegations.  I mean, particulars of negligence are still allegations, but you are saying that they were all accepted as facts for the purpose of the exercise.

MR REYNOLDS:   Yes, I am, and I say that that is the effect of what the Chief Justice says at paragraph 26.

FRENCH CJ:   So, does that mean that it was an agreed fact that – I am looking at 34 to make sure I am not misreading this - that:

In breach of the implied term of the retainer and in breach of duty, the defendant was negligent in and about giving the advice.

MR REYNOLDS:   Yes, your Honour.

FRENCH CJ:   Counsel for the respondent does not seem to agree with you.

MR REYNOLDS:   One can understand why they might try to argue otherwise.  It looks like somebody on one side of this Bar table did not look perhaps closely enough at the nature of these agreed facts before they were agreed.

KIEFEL J:   Was there an order noting them?

MR REYNOLDS:   Yes.

KIEFEL J:   What is the formality of this?

MR REYNOLDS:   The order is page 41, at about line 30, and also it is reproduced at page 39, at about line 21.

GORDON J:   The difficulty with that, Mr Reynolds, is that on page 40 the ex tempore judgment records that that separate question is to be decided on the basis of the assumed truth of the allegations in the amended statement of claim, which seems to be separate from the statement of agreed facts.

MR REYNOLDS:   As I understand it, these facts were agreed.  Once they are agreed, they cannot be treated as mere allegations.

KIEFEL J:   Well, how can we be certain that they have been agreed?

MR REYNOLDS:   As I say, that is the effect of what the Chief Justice says at paragraph 26.

FRENCH CJ:   Then, at page 41, paragraph 4, again in the ex tempore judgment:

In this case the parties are agreed that the immunity question can be determined on the basis of what is alleged in the amended statement of claim and the defence to that amended statement of claim -

Regardless of what the Chief Justice said, it is a bit difficult to see how the parties were proceeding on an agreement that one of them had been negligent.  In a sense it does not make any difference to your argument in this Court because your argument must be on the basis that you take the statement of claim at its highest. 

MR REYNOLDS:   Certainly.  I have proceeded on the basis of what the Chief Justice says.  What it does impact on is the order which we would seek because the order which we have circulated - I think your Honours should have a copy of it.  The effect of that is to ask, in substance, that the matter be remitted, if we are successful, simply for the assessment of damages, so that follows through on the line ‑ ‑ ‑

FRENCH CJ:   That is on the assumption there has been a concession as to liability?

MR REYNOLDS:   It is, yes, entirely.  Your Honours, I do not want to make a big deal of this.

FRENCH CJ:   This is not what the case is about.

MR REYNOLDS:   No, it is not, but that is, we say, the effect of what the Chief Justice has said.

KIEFEL J:   Just to be clear about it, Mr Reynolds, when his Honour refers to the agreed facts, it is only to this document, “Proposed Agreed Facts”, that his Honour is referring?

MR REYNOLDS:   Yes, and he was told, as I understand it, that they were agreed facts.

KIEFEL J:   Does that appear anywhere in the transcript?

MR REYNOLDS:   I have not checked that, your Honour, but your Honour sees that they are in paragraph 26.  They are either agreed or they are not.  There is a way, obviously, of framing a separate question, as a matter of law, as a notional demurrer – that is, treat what is in the statement of claim as allegations and, as your Honour the Chief Justice said, taking them at their highest, is that case defeated by the immunity pleaded in the defence?

FRENCH CJ:   Yes.

MR REYNOLDS:   That may have been what one or more people were trying to achieve, but that is not how it was, I have submitted, translated onto the record.  As I say, I do not have anything further to say about it ‑ ‑ ‑

FRENCH CJ:   Yes, all right, let us proceed.

MR REYNOLDS:   It only really goes to the question of the framing of the orders, and doubtless my learned friend will have something to say about that in due course.

FRENCH CJ:   Yes.

MR REYNOLDS:   If your Honours go to paragraph 86, a lot of copies of 223 CLR no doubt fall open at this page, because it is the paragraph that is normally referred to as a statement of the immunity.  Your Honours will no doubt have seen in the third line the words:

“work done out of court which leads to a decision affecting the conduct of the case in court” –

Now, there is a further qualification or a statement of a different version of the test a little lower down but we suggest that one needs to look at this test in a little more context to understand it rather than just pulling out those words I started with from this paragraph.  One needs to look, for example, at the characterisation of the person bringing such an action.  For example, is it a client, is it a client who is a litigant, is it a losing litigant client, et cetera, as opposed to other forms of plaintiff?  Also, as to the person who has the immunity, we tend to think of it applying to advocates because that is the way the case law has preceded – that is, barristers and solicitor advocates.  But this case, if one looks at the test at paragraph 86, may expand the case well into the area of what I will call solicitors’ negligence.  Your Honours will perhaps have seen in paragraph 91, over the page, the words in the third line:

or as solicitor instructing an advocate –

Anyway, I do not want to go into those aspects of the context, those two I just touched on.  What I want to focus on is another aspect of the context, which is what I will call the circumstances to which or in which the immunity attaches.  I want to take as my focus to begin with a section of the judgment of Justice McHugh, which your Honour Justice Gageler raised on the special leave application.  That is at paragraphs 166 to 168 of the judgment.  What happens, paraphrasing it to some extent at paragraph 166, is that Justice McHugh reviews the plurality judgment and says – this is four lines from the bottom of 166:

as the judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ demonstrates, public confidence in the administration of justice is likely to be impaired by the re‑litigation in a negligence action of issues already judicially determined.

There is a similar statement in the first four lines of paragraph 168.  If your Honours go to the top of paragraph 166, he says:

it is possible to sue a practitioner for the negligent settlement of proceedings -

So what he is saying, as a matter of construction of the plurality judgment, is that public confidence in the administration of justice is likely to be impaired by relitigation of matters which have already been decided by a court.  He says that if the issues, the subject of the action against the lawyer, have not been decided by the court, as in the settlement situation, then that rationale for the immunity will not apply and, therefore, if a solicitor or barrister is sued for negligent advice in relation to the settlement the immunity will not apply.

The proposition that he is proceeding on perhaps only implicitly there is that a proposition put, for example, by Sir Anthony Mason if your Honours have the decision in Giannarelli v Wraith (1988) 165 CLR 543 and relevantly at the top of page 560, where he refers in the fourth line on page 560 to the proposition that “to take the immunity any further”, that is and he has just referred to:

would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity.

So the ambit of the immunity, its rationale if you like, must be, he is saying, co‑extensive there with the relevant rationale.  That is, we submit, what Justice McHugh is saying at paragraphs 166 and also at paragraph 168.  Now, that, with respect to his Honour, is not a novel concept.  His Honour was probably picking up very similar statements that were made in the decision of the House of Lords in Saif Ali v Sydney Mitchell [1980] AC 198.

There is a very important passage, we submit, in Lord Diplock’s speech at pages 222 to 223 – to be more accurate, from 222D through to page 223P.  I would ask your Honours to read the whole of that in due course, but can I just highlight a few aspects of what his Lordship there says.  The paragraph beginning at page 222D, he talks about similarly to Justice McHugh “the need to maintain the integrity of public justice”, and he says that:

An action for negligence against a barrister for the way in which he has conducted a case in court is founded upon the supposition that his lack of skill or care has resulted in the court having reached a decision that was not merely adverse to his client –

but was also “wrong” because otherwise no damage could be shown.  At letter E talks about a “wrong decision” and at the bottom of that paragraph “he would have succeeded instead of failed”.  At letter F, he talks about “correcting a wrong decision” and around G he talks about the:

principles of public policy, which also discourage collateral attack on the correctness of a subsisting judgment of a court of trial upon a contested issue by a re‑trial of the same issue ‑ ‑ ‑

FRENCH CJ:   Is there a distinction between a concern about attacks on correctness and a concern about finality?

MR REYNOLDS:   We say that this is ultimately the way this immunity is framed by the plurality in D’Orta and I will be coming to that in a moment, but it is essentially the same concept, the same context which is being addressed, that is, that the nature of the action which is the subject of the immunity is an action of a particular kind, namely, one which involves a collateral attack upon a decision of the court.

Now, his Lordship continues on at letter G where he talks about a “re‑trial of any issue decided against a barrister’s client”, at H of a “re‑trial”.  Over the page at letter B, decision in the “previous trial was wrong”.  At the end of that paragraph at B “caused the wrong decision” and then he says this:

My Lords, it seems to me that to require a court of co‑ordinate jurisdiction to try the question whether another court reached a wrong decision and, if so, to inquire into the causes of its doing so, is calculated to bring the administration of justice into disrepute.

This is, perhaps, the most important bit, just above letter E:

A similar objection, it may be mentioned, would not apply in cases where an action has been dismissed –

That would be, for example, to give your Honours a reference to a case in this Court, the situation which applied in Johnson v Perez, that is, where an action had been dismissed without a contested hearing.  His Lordship says:

or judgment entered without a contested hearing –

and I interpolate, as here:

and there is no possibility of restoring the action and proceeding to a trial.  If the dismissal or the entry of judgment was a consequence of the negligence of the legal advisers of a party to the action, a claim in negligence against the legal advisers at fault does not involve any allegation that the order of the court which dismissed the action or entered judgment was wrong.

We submit that that is part of the essence of the operation of this immunity.  This is the situation to which the immunity is directed and this is the concern which certainly the majority of the House of Lords had in this case.  At the bottom of page 214H, Lord Wilberforce says that the:

immunity. . . depends upon the public policy.  In fixing its boundary, account must be taken of the counter policy that a wrong ought not to be without a remedy.  Furthermore, if the principle is invoked that it is against public policy to allow issues previously tried (between the client and his adversary) to be relitigated between client and barrister, it may be relevant to ask why this principle should extend to a case in which –

which is not the facts of this case:

by the barrister’s (assumed) fault, the case never came to trial at all.  These two considerations show that the area of immunity must be cautiously defined.

To similar effect, we would suggest, is the statement by Lord Keith, the other member of the majority, at page – sorry, not Lord Keith, Lord Salmon at page 232 at letter F.  Can I also give your Honours a reference to one of the dissents, Lord Keith, at page 237A, who wanted a much broader test of the immunity and in criticism, as it were, of the majority holding, he says at letter A that:

The suggested restriction –

that is, of the other members of the House of Lords:

of the immunity would presumably exclude from its scope all cases relating to contemplated litigation which did not actually reach the stage of a hearing in court, and all litigation settled, compromised or abandoned.

If one goes to the actual facts of this case ‑ ‑ ‑

FRENCH CJ:   Just before you go to the actual facts, if one assumes that an attack, an action against a barrister for advice leading to a consent order or a solicitor in connection with the proceedings, leading to a consent does not involve impugning the correctness of the decision, does it still engage the finality principle in some way?

MR REYNOLDS:   Well, I will be dealing with that to some extent later but ‑ ‑ ‑

FRENCH CJ:   Do you say they collapse into the same thing or do you accept that finality is a wider concept than correctness, impugning correctness?

MR REYNOLDS:   Well, it depends how one frames finality and I will be putting an argument to your Honours in the course of the argument, in the course of what I wanted to say about my application to re‑open the correctness of D’Orta that explores that particular issue but we would submit that there is a line of doctrine here that starts with - and I will be going to this later on - the decision in Rees v Sinclair which is the New Zealand case which was applied in Saif by the majority and then through Saif to Giannarelli and then through to D’Orta.

The statement of principle in each of these cases leading up to D’Orta, first of all is consistent with the proposition that I am putting and we would go further and submit that the principle that I am putting is also directly supported by those cases and by the, as Justice McHugh says, the plurality judgment in the D’Orta decision.  Now, so far as - and I will be 30 seconds on this – the actual facts of Saif Ali were concerned, there summarised, that around 224F, he just says this:

The work which the barrister in the instant case is charged with having done negligently, viz., in advising as to who was to be a party to an action and settling pleadings in accordance with that advice, was all done out of court.  In my view, it manifestly falls outside the limited extension of the immunity ‑ ‑ ‑

But what of course actually happened there is that there was a later decision by the court.  Now, the point that Lord Diplock and Justice McHugh are there making is that in this situation the administration of justice is brought into disrepute if there is this form of collateral attack on the judicial decision.  The point that Justice McHugh is making at paragraphs 166 and 168 is that the administration of justice is in no way brought into disrepute where there is no attack on an actual decision of a court which of course is the situation where there is a settlement, whether or not that leads to consent orders or not.

Well, is Justice McHugh’s interpretation of the majority in this D’Orta Case correct?  We would submit that it is and can I take your Honours to some relevant passages in that regard.

KIEFEL J:   Just before you do, the references to “an order of the court”, the distinction that it is not being said that the order of the court or the decision is wrong carries with it connotations of there being facts which might be shown to – something underlying it which might be susceptible to a different view of the facts, or different facts put forward.  My question is, is it to say anything more than the order would have been otherwise, or does it mean more than that?

MR REYNOLDS:   No.  There is, for example, consent orders made, and somebody comes along – there is no judgment; there is no review by the judge of the facts, analysis, the evidence, the witnesses, the issues of law, what have you.  All there is is some kind of consent order.  For someone to come along afterwards and say “if my case had actually gone to a hearing, the likely result of it is such and such”, then that does not bring the administration of justice into disrepute.

It does not involve a situation where somebody is going through – as in the other situation, where there is a judgment – and saying there would have been a different result on this, and his Honour would have decided that question differently on issues of fact, and he would have decided this question of law differently if this had been put to him, what have you.  The kernel of what they are saying is that that brings the administration of justice into disrepute.  I will be saying something in response to that on the issue of reopening and overruling ‑ ‑ ‑

KIEFEL J:   I suppose what I am really asking is, I wonder how helpful it is to say that one can draw a distinction where it is not said that an order of the court is wrong or not, because the essence of an action for negligence usually is that but for the action, the ultimate order would have been otherwise, and that would apply in this case.

MR REYNOLDS:   Yes, but again, as I have said, taking this reasoning, this justification – this core justification for the immunity, as their Honours stated – there would not, as Lord Diplock says, be any difficulty with a case being run after it has been dismissed otherwise than on the merits, which is the actual case against a solicitor in Johnson v Perez – I will get you the reference in a moment – or in other situations where there simply is not an extant series of reasons for the decision and where the judge has not actually decided anything. 

The reference to Johnson v Perez (1988) 166 CLR 381, which is the situation that Lord Diplock was adverting to at letter D on page 223, where he talked about an action being dismissed without a contested hearing. I do not want to overly finesse this, but just stepping back a little, all we are really saying is what does it matter if the only relevant involvement of the court has been to enter orders that the parties have been agreed on. If somebody wants to come along later and say if the case had actually been run, and run through to completion, then the following result would have obtained.

That does not, we submit, diminish the administration of justice one iota, just as it did not diminish the administration of justice one iota when Johnson v Perez after the action had been dismissed otherwise than on its merits, the court went through the exercise of saying what would have happened if this case had not been dismissed for want of prosecution – which are the facts in that case – but otherwise had been run and been the subject of a judgment?

Another way of putting it is that you do not get conflicting judgments or reasons for decision.  You just get one final analysis by a judge as to how the case should be decided rather than a first judgment where the second judge then, as it were, investigates at some level what the first judge did in his or her reasons for decision, his or her treatment of the facts, the law, the witnesses and what have you.

If all you have is an involvement of a peripheral nature in the making of orders to dispose of the litigation, we submit that the relevant rationale for this rule is not offended and, stepping back from it a little, there is absolutely nothing wrong with such an action any more than there was anything wrong with the action that was brought in Johnson v Perez.

KEANE J:   So to come back to the question the Chief Justice asked you earlier, is what you are saying that the finality concern is not with the general notion that there should be an end to suits but that the correctness of decisions of courts should not be impugned by a collateral attack on the way that decision was reached?

MR REYNOLDS:   Yes, your Honour, I say that the statement of the immunity should be limited in a way that is very, very close to the way your Honour just stated.  I would put it perhaps ever so slightly differently if the action were to involve a collateral attack on the correctness of a decision of the Court.

FRENCH CJ:   Just going back to the point you were making earlier, you would say that the worst case money judgment against your client, if it had gone to trial, would have been 1.8, plus costs?

MR REYNOLDS:   Yes, and here there are consent orders and my client’s action down the line will result, for the first time, in the first reasons for decision dealing with his action, the original action.  Or it reviews it and says, “This is the way that case would have been decided if it had been run,” rather than “This is the way the earlier decision should have been resolved” – that is, differently from the way that it was by reason of changing the substratum of fact or law in a way that eliminates the relevant negligence of a practitioner.

KEANE J:   Mr Reynolds, I have a bit of a difficulty with that in the sense that – and I may not be understanding the facts correctly, but looking at the consent order and the agreed facts, I do not understand your case against Mr Bell’s clients to be that they negligently advised your clients that they had a liability for $3 million when everyone knows they only had a liability for one point whatever it was under the guarantee.  The grievance, as I understand it and I confess I am not entirely sure how the agreed facts work, grievance seems to be about a new charter of rights, not the liability under the guarantee but the new charter of rights under the terms of the settlement under which a new liability was assumed. 

Now, whether or not the assumption of that liability was consistent with the exercise of reasonable care by Mr Bell’s clients might depend upon whether it was worth your client’s while to get another five months to pay, whether the fact that there were assets in the company that – or under securities given by the company that it might have become available, or may not, that your clients and the company would have been relieved – well, the company would have been relieved of the balance of the liability above 1.7, the company would have been discharged from that, whether that was valuable to your clients because of the nature of their interest in the company.  All these things would seem to be matters that would be litigated because the real complaint is not about negligent advice about what they were obliged to pay under the guarantee but whether the settlement was a good deal.

MR REYNOLDS:   It is very difficult, I submit, given the nature of the agreed facts to analyse the matter in accordance with the sort of distinctions that your Honour is raising – which, of course, are very relevant to the existence of negligence and causation.  The problem is, and I freely confess it, that the statement of the facts – the agreed facts – does not enable the kind of hyper analysis that your Honour is, with respect, engaging in at the moment which would be, I submit, more than appropriate obviously at the trial. 

The difficulty at the moment is that there is a measure of opacity about the way – exactly the way the case would be conducted at trial particularly on the issues of negligence and causation and your Honour is, with respect, picking up on that.  Now, the situation at the moment is that I cannot really do anything about that.  I accept the measure of opacity but I would not dissent from the summary which his Honour the Chief Justice put to me a couple of minutes ago as to the essential gravamen of my client’s concern in this case.

GORDON J:   Mr Reynolds, I am a bit lost.  I do not quite understand that.  If you go to paragraphs 12 and 13 of the statement of agreed facts, or extracts from the pleadings, the case pleaded is a complaint about advice given, advice about the effect of the proposed new deal, the terms of the deal, what was told to your clients about those terms and the effect of them.  It has nothing to do with the way in which the trial would have been conducted.  It is a separate plea. 

So on any view of that pleading there would not be an assessment of what would have happened in court on the old claim.  This is a separate new claim about whether advice was given and, if not given, should have been given about a new deal – new terms of settlement.

MR REYNOLDS:   Yes.  In order to assess the damages in the case we have to look at putting my clients back in to the position they would have been had the alleged negligent advice not occurred which involves looking at what would have been the likely result of the case if it had been litigated in due course.  The point of departure that I have fixed on is that that would be an analysis that is conducted for the first time by the relevant judge at the hearing of the case against the solicitor.  But there is a difference, I submit, between the way the case is put, both on duty and on negligence and causation and on the question of the relevant characterisation of the case for the purposes of the immunity. 

Your Honours, I need to go to the – to try and make good the suggestion made by Justice McHugh that the plurality judgment in the D’Orta Case supports the analysis which he gives to it at paragraphs 166 and 168.  One aspect of that is to focus on paragraph 31 of the D’Orta decision where your Honours will see that there is a quotation from Sir Anthony Mason in Giannarelli and this is connected to footnote 59 where he talks about:

“the adverse consequences for the administration of justice which would flow from the re‑litigation in collateral proceedings for negligence of issues determined in the principal proceedings” . . . was held to be determinative.

If your Honours go to the footnote, that is, footnote 59, there are a series of references there.  Can I add into footnote 58 the discussion at page 558 of Sir Anthony’s judgment?  Can I note that in footnote 59 the reference to page 579 of Justice Brennan is where he agrees with the Chief Justice.  The rest of those references all go to this notion of the tarnishing of the administration of justice if there is a collateral attack on issues determined in the principal proceedings.

There are a number of other paragraphs that I would take your Honours to in that regard.  I am losing my grip on the time because I have only got a short time under my agreement with Mr Bell to get through all these issues.  But can I refer your Honours to paragraphs 74, 75, 78, particularly 79, 80, 37 and 42?  But can I dwell just briefly also particularly on paragraphs 67 to 70 and 81 to 83 because this is a central portion of the discussion of the way this immunity operates in D’Orta. 

Your Honours will see that there are three consequences that are mentioned there – a wrong final result, a wrong intermediate result, and wasted costs, which, I will be submitting in a moment, is talking about adverse costs orders.  Each of those three situations involves a decision.  In paragraph 67, second line, the client has lost the case.  In paragraph 68, we are talking about conviction with imprisonment.  Paragraphs 69 and 70 mention an adverse result from a wasted costs order, and there is a similar statement at paragraph 83, halfway down –

To challenge the costs order, therefore, will often . . . involve a direct or indirect challenge to the outcome on which the disposition of costs depended.

This is the focus that their Honours have in each of these three core instances, the first being, as they say, the paradigm – this is paragraph 72 – the paradigm case’s final result, and that is in paragraph 67.  All of these instances fall within what I am suggesting is the relevant principle, namely that there has been an actual decision. 

Of course, your Honours will recall the facts in the D’Orta Case were consistent with that because there, there had been, looking at paragraph 68, a conviction.  If your Honours go to our outline at paragraph 1.8, we have collected there some cases which support the proposition that any statement of principle has to be looked at in the context of the particular facts and context of the case.

In all of these cases, we are dealing with a situation where the issue they were addressing had involved an earlier decision by the court.  We have two things that work here; we have statements, I suggest, of principle about the need for a decision, and then secondly, in all of these foundational cases, the facts are consistent, I submit, with the proposition that I am putting, and that the statements of principles in these cases need to be looked at in the light of that particular context.

GAGELER J:   In D’Orta, the conviction was on a plea of guilty, was it not?

MR REYNOLDS:   Yes.  What happened in D’Orta was – it is what they call in that case an intermediate result.  What happened is the client was convicted.  The conviction was later overturned after an appeal, but there had been for present purposes a decision made by the Court, which is the proposition that I am trying to establish.  I am pretty sure I know exactly where your Honour is going here ‑ ‑ ‑

GAGELER J:   Well, it is pretty obvious where I am going, but what is the answer?

MR REYNOLDS:   We are talking about whether the decision is subsisting, which is where I understood your Honour was leading.

GAGELER J:   A decision on the merits is what I understood you to be looking at.

NETTLE J:   It was a decision on the merits in D’Orta.  He was allowed to withdraw his plea and convicted because reference was made to ‑ ‑ ‑

MR REYNOLDS:   That is what I am trying to get to.  But I thought your Honour’s mind was travelling on a little to the notion of:  “Well, hang on, would that apply to a situation where a decision had been made” – which is my proposition and I am trying to get to – “but is no longer subsisting.”

GAGELER J:   I think it was also the case in Giannarelli.

MR REYNOLDS:   It was, exactly. That is what I am hoping to finish with.  But if your Honour will bear with me for one moment while I find the relevant passage of my notes we submit that is a problem when we come to the issue of reopening and reagitating the correctness of these decisions because, put shortly, where is the tarnishing of the administration of justice in launching a collateral attack on a decision which is no longer subsisting?  I took your Honour’s question to ultimately be directed to that.

That is a view, to anticipate things, which Lord Diplock took in Saif at page 222G – my note is that the Supreme Court of New Zealand in Chamberlains v Lai also took that view, or one of the judges did, at paragraph 55.  Your Honour understands that I am performing a bit of a straddle here.  The first part of my argument assumes that the immunity exists and, at one level, I have to kind of support it or support a version of it.  I then have to turn around at the back end of my argument and then attack the very immunity or the ambit of the immunity that I have asked your Honours to uphold.

I accept the inconsistency, but that is the way I would respond to that issue by concluding that a better way of putting it if one is going to have this rationale is that there be a subsisting decision but that would involve, as your Honour Justice Nettle said to me, some inconsistency with the actual decisions in D’Orta and Giannarelli.  At the moment, I am hanging onto them for grim might and their correctness and trying to say that the submission I am putting comes fairly and squarely within those two cases.

We submit that that approach that Justice McHugh discerns in the plurality judgment in D’Orta is a correct reading of the plurality judgment.  Your Honours will have seen that much of the reasoning in D’Orta, particularly at paragraphs 85 to 87 involves their Honours wrapping themselves, as it were, in the mantle of the earlier decision.  They say, well, we adopt what is said in D’Orta, no challenge has been effectively made to that reasoning.  Just above 88, we apply Giannarelli to this case.  They are saying that they are fairly and squarely within the way the Court reasoned in Giannarelli in these paragraphs.

Now, the notion that I have taken your Honours to in Justice McHugh’s judgment and in Saif Ali and also in D’Orta, is also replicated in the Giannarelli Case.  Can I take your Honours briefly to those references?  At page 558 about a third of the way down the page, your Honours see this reference in Sir Anthony’s judgment from about point 3 to about point 8 and again he is talking here about collateral attacks on decisions, tarnishing public confidence, disappointed litigants and decision in the initial litigation, and that is the passage I said had been left out from the footnote in D’Orta that I took your Honours to a moment ago.  At page 573, at the bottom of the page, Sir Ronald Wilson talks about relitigation and the fourth‑last line:

with a view to proving that the original decision was wrong . . . If the negligence action succeeds, then the original decision, notwithstanding that it may have been affirmed on appeal, is necessarily tarnished by the later inconsistent decision.

I would ask your Honours to read the rest of page 574 at your Honours’ leisure.  Justice Brennan at page 579, point 7, agreed with the Chief Justice’s reasoning relevantly, and there is also a discussion in Sir Daryl Dawson’s judgment, which I take you to the bottom of page 594, where he talks about weightier considerations, so this is in the context of important matters.  At about point 8:

The first, to my mind, is the availability of an action in negligence for the conduct of a case in court would subject the decision of the court to collateral attack by a client who sought to blame his barrister for his loss of the case.  Not only would this mean relitigation of issues already decided, but the relitigation would be –

et cetera.  Then over the page, he talks about, at the end of the paragraph at point 3 on 595:

the policy that there be an end to litigation.  If the decision of a court is wrong, the appeal process –

that assumes the decision, of course –

is the means by which it should be corrected.

Now, just to conclude matters, can I give your Honours some references to the Rondel Case which is perhaps the second last of the foundational cases which I said are consistent and can I just give your Honours some brief references to the fact that this was a case about wrongly convicted, that is, in that case it had not been overturned on appeal.  I will give your Honours a reference to pages 195F, 230B to C, 236C, 249 to 251, 253E to G, 258A and 275E.

FRENCH CJ:   So the proposition – you have given us a lot of numbers, what is the proposition you are ‑ ‑ ‑

MR REYNOLDS:   The proposition is they do not actually – I have said there are two things - one is facts which are consistent with my proposition and where the statement of principle occurs in that context.  This is an example of that in Rondel.  It is not an example of where they state the principle in the way that the passages in Giannarelli do.  All I am saying is you have a line of cases where both the factual substratum and the statement of principle into that has consistently been a situation where there has been a decision of a court, not the situation that Lord Diplock referred to where you have orders which are made otherwise than on the merits.

So obviously what I am trying to get to, I have called these cases the foundational cases:  Rondel chronologically I just mentioned, then there is Rees in 1974 which I will come to in a moment in New Zealand, then Saif Ali in 1980, then Giannarelli and then D’Orta‑Ekenaike, and the theme of the – more than a theme of the plurality judgment is that they are adopting Giannarelli and Giannarelli has this consistent line back through these various foundational cases. 

Now, I have asserted that the decision in Rees is consistent with the proposition that I am putting.  I have to own up to a slight difficulty with that and that is that the decision in Rees v Sinclair – let me put it this way.  It was a matrimonial case which involved a husband being annoyed with his barrister for not putting certain things in cross‑examination. 

That, I think, tells your Honours about the next point, relevantly, which is that the facts of the case are not fully reported in either the judgment of the Court of Appeal which is [1974] 1 NZLR 180, or for that matter, the judgment at first instance which is [1973] 1 NZLR 236. But there is, if I can refer your Honours to this, quite a good potted summary of what the case involved in the Saif Ali Case at page 232 in the top half of the page where your Honours will see the facts which I assert necessarily would have involved a previous adverse decision of the court but I concede I cannot actually prove that definitively.

In short, your Honours, I submit that the interpretation of the immunity given by Justice McHugh is the correct one and that it is consistent with D’Orta - its correct reading of D’Orta and its consistent statements of principle and the approach taken in each of these foundational cases.

FRENCH CJ:   Now, relevantly to this case, is it an accurate statement of a proposition that is sufficient for your purposes that, whatever the scope of the immunity, it does not extend to negligent advice by an advocate merely because the advice leads to a consent order disposing of the proceedings?

MR REYNOLDS:   Yes, because that involves no collateral attack on the correctness of a decision of the Court and that is the proposition I am trying to get to and I say supported by the observations of Justice McHugh and your Honours know that I say by all of the other cases as well.  That is really the first part of the first half of the case.  Obviously, if your Honours accept that reading of the immunity, on one view your Honours need not go any further but I have to assume, obviously, that your Honours may not accept that. 

If your Honours do not, then I need to look a little more closely at this immunity and its provenance.  If your Honours go back to paragraphs 85 to 88 of the decision in D’Orta, I have already said that their Honours repeatedly say in those paragraphs that they are very happy with the decision in Giannarelli, they do not need to reconsider it, they do not need to depart from the test in it, they are happy to adopt the criterion and in the heading above 88 they actually apply Giannarelli to the case.  So one would think that this analysis here is what one might call a straight lift from the decision in Giannarelli.

I want to go back and have a look briefly at Giannarelli.  Before I do, Justice McHugh purports to give a potted summary of the reasoning relevantly in the Giannarelli Case at paragraph 151, if your Honours go to that.  Your Honours see there a statement of the recent Sinclair test and his Honour notes that the majority adopted that statement.

FRENCH CJ:   I am sorry, now can you just give me the page reference for Giannarelli that you are ‑ ‑ ‑

MR REYNOLDS:   This is D’Orta, I am sorry, at paragraph 151 on page 51 of the D’Orta judgment, where Justice McHugh says that in Giannarelli the majority adopted the test in Rees v Sinclair which he states.  If your Honours go to footnote (196), again page 579 is Justice Brennan agreeing with Sir Anthony Mason, but can your Honours add in next to Justice Dawson a reference to page 588 at point 9 over to 589, point 1, which needs to be taken in conjunction with page 596.  Justice McHugh notes:

The passage had also been adopted by the House of Lords in Saif Ali v Sydney Mitchell & Co as the appropriate test.

So if we go back to Giannarelli, and a convenient page that is often referred to is page 560, I want to look briefly at what Sir Anthony Mason reasons his way towards a conclusion in this case.  If your Honours go about six lines down on page 560, he says, I submit, unambiguously that he would agree with what Justice McCarthy said in Rees v Sinclair and he then refers to the test Justice McHugh had quoted that I mentioned a minute ago.  He says:

“. . . the protection exists only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing.”

Now, your Honours will notice that the issue is whether the work, that is, the work which is the subject of a claim for negligence, whether it can fairly be said to be a preliminary decision, et cetera.  He says that this is a “persuasive statement”, that it “was indorsed by four members of the House of Lords in Saif Ali”, and heaps further praise on it.  He says:

Once this view is accepted, the immunity necessarily extends to a decision about the way in which the proceedings for perjury under s. 314 were to be conducted.  Just how such a decision –

that again picks up the words of the test –

came to be made we do not know –

Again, as in this case, perhaps a problem with the facts, and this is important, he says:

But it is more likely that counsel thought –

et cetera.  So he is talking here about counsel’s decision, and if one goes to the bottom of that paragraph at about point 8, this was a decision not to raise a particular section of an act as a defence.  So that was counsel’s first decision.  Secondly, a forensic decision not to raise it as an:

objection to the reception of the evidence.

So, Sir Anthony is, first of all, I say, clear as a bell adopting this statement in Rees.  Second of all, he is interpreting it in such a way that the relevant work is a decision by the advocate and it is a decision about the way the case was to be conducted and the two species of that proposition are raising it in court as a defence and also raising it as an objection to evidence.  He says, well, we do not know when that decision was made because the facts are not clear.  That is at point 5 on page 560, but a decision by the advocate it certainly was and, therefore, it comes within the immunity.

Now, a couple of other matters about this test in Rees v Sinclair - I would like to emphasise briefly in the context a couple of statements in the Saif Ali Case, if your Honours could turn back to that?  The first is that there is a statement – this is Saif Ali v Sydney Mitchell – at 224 at about letter E where Lord Diplock talks, I would submit, about the rationale for this test.  He says there that the immunity in court:

is not to be circumvented by charging him with negligence –

out of court.  The same point is made at 231H – the underlying reason or one of the underlying reasons for - bottom of page 231 - a:

device to circumvent this immunity –

are the words I am talking about – it is not to be used – I withdraw that.  What one cannot – excepting that there is an immunity for negligence in court, which is a given in this discussion – they are saying would it not be silly if someone made a decision – a barrister made a decision not to cross‑examine or not to run a point in the courtroom and is not immune.  But if he made that same decision, or she made that same decision, say, the day before in chambers, out of court – a decision, for example, they are not going to cross‑examine a witness or they are not going to call a witness, or they are not going to put a point, they are not going to put a defence, not going to argue a particular matter of admissibility – I say would it not be silly if you could circumvent the immunity in that way.

The other important point that all the three Lords in the majority in this case say is that this exception, that is, the exception to the general notion that work out of court may be the subject of a negligence action, they say that exception – or, I would submit, the immunity – is one which is very narrow, rare and limited.  The references to that are at 215A, 216A to B, 224A to C, 224F and 231D.

They make it very, very clear that this is a very, very narrow extension into that area - not, for example – and I will be picking up this theme later, and this was the majority view – all or even some general conduct of litigation.  It is only if you come precisely within this particular formulation.  As Sir Anthony Mason said, quoting Justice McCarthy, the protection exists only where that particular test is satisfied.

As further proof of that, can I finish with Saif Ali on this point?  They found that the particular negligence in that case was clearly outside the immunity.  They say that at, for example, 224G, 216B, and 232F.  That particular case, as I think I noted before – this is noted in the headnote – was about including a party in a pleading, settling pleadings, et cetera.

I mentioned the Rees Case.  Can I go back to that briefly – this is Rees v Sinclair – and note just three passages.  This is the judgment that is endorsed in Saif Ali, which was in turn endorsed in Giannarelli. The first reference is at page 187 of that decision, at about line 20, where Justice Macarthur, having just stated the test which everyone refers to, says:

The protection should not be given any wider application than is absolutely necessary in the interests of the administration of justice –

At page 187, at about lines 35 to 40, your Honours will notice that he too talks about a decision by Mr Sinclair, who was the advocate.  That is the relevant negligence there, as again the decision by the advocate.  At page 190, at about line 16, Justice Macarthur says that the immunity should be confined to what he calls –

the true work of an advocate –

I submit there is not much doubt that when one looks at this Rees test, as one might call it, that it is a very narrow test.  It is really confined to what might be called an advocate’s forensic decision‑making out of court.  Would that, to cut to the chase, cover advice by counsel relating to the settlement of a case?  I submit that it is tolerably clear that it would not.  If your Honours go back to the statement of the principle at page 560 at point 2 in Giannarelli in Sir Anthony Mason’s judgment, the relevant immunity only applies where the work is a preliminary decision, as we have said, by the barrister about the way the case is to be conducted.

Now, I submit again that it is tolerably clear that advice, for example, about tax position or capital gains tax on a judgment or quantum or what have you, which may be relevant to a client settling a case, on no view amounts to a decision by the barrister which can fairly be called a preliminary decision affecting the way the case is to be conducted.  It is a difficult call to suggest that that statement of principle, this narrow exception, should be so extended, for example, to settlement advice and no matter at what stage it occurs.  That, as your Honours heard earlier, is the view that Lord Keith took in the Saif Ali Case – this is at page ‑ ‑ ‑

FRENCH CJ:   That advice within the immunity would cover advice as to concessions, agreed facts and so forth.

MR REYNOLDS:   Well, in that instance, your Honour, that is not what I would call true advice; it is not what one might call Hedley Byrne advice because that is really the barrister advising the client of what his decision is. So it is not a situation where there is advice given by the barrister to the client and the client then makes ‑ ‑ ‑

FRENCH CJ:   Well, if it is in a criminal case, for example, there might be a formal admission and that might be the result of advice.

MR REYNOLDS:   Again, it is still a matter for the barrister.

FRENCH CJ:   Or the client in the end.

MR REYNOLDS:   But in that instance it is a matter for the client.  The point that I am making is that this particular statement of the immunity in Rees is, as I say, about forensic decision‑making by the advocate out of court on a matter which is, as I would put it, within his or her bailiwick – that is, the actual conduct of the case in court. The sort of thing on which a solicitor cannot give counsel instructions or the client cannot give counsel instructions is a matter for counsel and what he does in court in the conduct of the case is the subject of the immunity and likewise his or her decision as to how he or she is going to conduct a case made in chambers in relation to what happens here is likewise within the immunity.

But the immunity, I submit, does not go any further and it does not extend in any blanket form to advice generally because the sort of situation where you are talking generally about advice being given to a client and then acts on it and makes a decision accordingly and then give instructions cannot be fitted within this particular statement of the immunity.

NETTLE J:   What about an advice to plead guilty?  Where would you say that lies - within or without the immunity?

MR REYNOLDS:   If one unpacks that a little, the question of whether or not a client pleads guilty is ultimately a matter for the client.  A barrister, not one worth his or her salt, would ever say that that is the barrister’s decision.  What the barrister would do is give advice on integers that may be relevant to the client making the decision, which is his or hers alone, about whether or not to plead guilty.  To respond to your Honour, that situation, I submit, does not come within this particular test of immunity.

KIEFEL J:   The passage that you took us to from Justice McHugh’s judgment in D’Orta at paragraph 153 suggests it may not be quite so clear cut because his Honour makes the point that a plea of guilty may come with an immunity depending upon the timing of the plea because it affects the sentence imposed, so it brings into account decisions made critically in the conduct of proceedings.

MR REYNOLDS:   Your Honour, there is a little bit of an enigma here, which I promise I am going to attempt to uncover in a few minutes.  But can I, acknowledging that I am not for the moment responding to your Honour, say that I will attempt to and respectfully invite your Honour to remind me if I do not deal with that issue.

KIEFEL J:   I will.

MR REYNOLDS:   What I am trying to get to is a first base in my argument, which is essentially this.  If one looks at this decision in Rees, referred to by the majority judges in Giannarelli, and one interprets it, for example, as Sir Anthony Mason clearly interpreted it – your Honours have heard what I said about that – then it will not apply to advice vis-à-vis settlement.

Can I give your Honours some other references to that authority on that proposition.  We have listed them at paragraph 2.8 of our outline.  I think I referred already to each of those.  Can I just dwell on the Arthur Hall Case for a moment.  I have said enigmatically that there are four cases there.  What I mean – and I should make this clear – is that the Supreme Court overruled the immunity in Arthur Hall.  The Court of Appeal applied the Rees test to four cases.  In each of those four cases they found that the immunity did not apply to the relevant settlement advice.

So, this is an example, I respectfully suggest, where, notwithstanding the High Court has taken a different view of things, where the discussion in Lord Bingham’s judgment is still of some relevant value and has not been, as yet, superseded in terms of its relevance for this particular country.

My learned friends refer, as do many judges in this context, to the decision in 1978 in New Zealand of Biggar v McLeod which is referred to at 2.8 of our outline.  They rightly say, but hang on, in the very jurisdiction from which this Rees test that you are relying on emanates, when the Court of Appeal had to consider this very situation they held that settlement advice was within the immunity.  So that, they submit, is a substantial problem.

Your Honours, even though this places at a great deal of influence – and I would submit unfortunate influence – over the analysis of this issue, there is a very clear riposte to Biggar v McLeod and it is this.  On no view, does this case actually apply the test in Rees v Sinclair which they had held to be applicable only four years before.  Can I demonstrate that and I submit it is clear by reference to the following passages?  The judgment of Justice Woodhouse, with whom Justice Quilliam agreed – at page 12 at line 5 let us look at how he states the immunity.  He says:

I think the expression used by Lord Reid “the conduct of litigation” properly indicates the kind of situation which ought to give rise to the protection.  

At line 37, again:

the conduct of litigation –

At line 41:

the conduct of litigation –

or, it gets even wider:

part and parcel of the work of counsel in carrying forward the proceedings to a conclusion –

at line 45.  This is not the Rees test.  This is the minority view in Saif Ali from the very judges that rejected the Rees test.  The statement also on page 11 at line 34 again – work related to the conduct of the litigation.  As I say, Justice Quilliam agreed with his Honour.  There is a further statement of discussion at page 14 where Justice Richardson gets a little closer to the test – and I will not go through it all – but I respectfully submit, footles markedly with the text of it and then fails accurately to apply.  That, we submit, is the response to Biggar v McLeod and we submit that their failure to apply the Rees test is clear beyond argument.

Now, that is the position that obtained prior to the decision of this Court in the D’Orta Case.  After the D’Orta Case, there were some cases and we refer to them, I think, in outline that found that settlement advice was within the immunity but I have to concede that probably a substantial number, and particularly in the New South Wales Court of Appeal, did not.  Those cases after D’Orta, or many of them, found that settlement advice was not within the immunity so there is a little bit of a divide there in the case law.

Now, the reason that this happened, and this is the riddle I referred to before in answer to your Honour Justice Kiefel, there is a reason for that and that is that if your Honours go back to the D’Orta Case around paragraph 86, where, as I have said at least twice, the plurality are intending to adopt and reaffirm the test in Giannarelli and to apply it, what happens is that there is - a rather bizarre thing happens, I submit, and if your Honours go to paragraph 86, your Honours will see in the third and fourth line, the expression I started this appeal with, namely:

the defendant took over the conduct of the defence . . . including the conduct of settlement negotiations in relation to the proceedings –

That is on page 4 of the appeal book.  That was met with the defence in paragraphs 4(a) and 4(c) of the defence, appeal book page 21, meeting that pleading on its ground in respect of the conduct of the defence including the conduct of settlement negotiations in relation to the proceeding.

But, moving from the particular to the general, we do identify other ways to show that settlement is part of the conduct of the case, and one example is the principle of a lawyer’s ostensible authority to compromise litigious disputes and to bind their clients to that compromise.  This Court referred to that principle in Smits v Roach 227 CLR 423. Could I go to page 441 at paragraph 46, and the first two sentences of that paragraph in Smits v Roach are that:

The adversarial system of litigation operates upon the basis that a party is generally bound by the conduct of counsel, and that counsel has a wide discretion as to the manner in which proceedings are conducted.  The width of that discretion is reinforced by the role of the barrister as an officer of the court, by the barrister’s paramount duty to the court, and by the public interest in the efficiency and finality of the judicial processes –

footnote (18), a reference to D’Orta.  In other words, this principle of ostensible authority – and there are other principles of the law – depend upon and are underpinned by the same notion of finality as this Court relied on in D’Orta to support the immunity.

For example, another example might be thought to be Anshun estoppel, in which, to paraphrase that basket of principles, the law says no, that judicial controversy has come and gone; it has been resolved, and you will not now be permitted to go back to that controversy that has been terminated.  When one considers the principle of ostensible authority of Anshun estoppel of these other aspects based on finality, there really does seem to us, with respect, to be an important coherence point; in other words, it would lead to incoherence if the rationale underlying the immunity were revisited, but these other principles of law continued on in their present form.

Can I briefly stray to a wider question where your Honour the Chief Justice asked my learned friend, Mr Reynolds, so far as the underlying rationale is concerned, is there a distinction between attacks on correctness and the principle of finality or the interests of finality and we agree, with respect, with my learned friend, Mr Bell, that finality in the sense used in D’Orta is a much wider concern and that seems to us to be explicit in D’Orta at paragraphs 32 and 43.

The concern of the Court with finality is not limited to challenges to correctness of decisions that have been made and in fact at paragraph 70 in D’Orta it is pointed out that usually the plaintiff will be relying on the continuing operation of the previous decision as that which proves the loss and so relitigation in the sense of going back over precisely the same ground is certainly one aspect of finality and there are costs and inefficiencies and so on involved with impugning that past conduct, but the vice to which finality guards against is that it controverts the fair or just basis of the orders being made and it really involves the proposition to allow the negligence action to go on to involve the proposition that that result ought not to have occurred.

That judgment though lawful in terms of correct and not appealed from and though operative is wrong and Chief Justice Bathurst in the Court of Appeal, at appeal book 94 at paragraph 41, uses “wrong” in this broader sense, in our respectful submission.  In other words, the previous decision is taken to be lawful and effective and in that sense correct, but allowing the negligence action to go forward is wrong because it undermines the basic judicial function of quelling the previous controversy.

Finality is meant to prevent, in our submission, a new process, a new claim to the effect that the manner of the disposition of the controversy on the previous occasion does not occur with the real justice of the case or the underlying merits of the dispute.  That is the interest that is being protected.  It is not because it is unedifying or embarrassing to attack and examine the judgment.  The real problem is it asserts that the judicial function of quelling the controversy has failed on the previous occasion; that is the real underlying vice, in our submission.  The decision in D’Orta in paragraph 32, in our submission, expressly reverts to that fundamental principle as justifying immunity, correctly, we say.

Finally, your Honours, can I indicate that, as in paragraph 8 of our outline of argument the principles of abuse of process, in our submission, would not provide a satisfactory alternative to protect the interests that would otherwise be protected by the immunity, the first reason is that, as Justice McHugh said in D’Orta in paragraph 201, usually there would be no abuse in seeking compensation for a wrong - that is not an abuse of process.

So there would need to be some very fundamental reformulation of abuse of process principles to step in and take the role currently performed by immunity from suit, and if there were to be such a reformulation, even then we may not know an individual case of asserted negligence to what extent that case will require controverting the earlier decision without a very close examination of the matter, which rather defeats the whole purpose because that is what is precisely being sought to be avoided.  May it please the Court.

FRENCH CJ:   Thank you, Mr Lancaster.  Yes, Mr Reynolds.

MR REYNOLDS:   Your Honours, before I come to my reply, can I just correct a reference I gave to your Honours earlier when I misread my learned junior’s writing.  It was to Johnson v Perez (1988) 166 CLR 351, not the page I gave to your Honours.

I have a short number of points in reply.  The first is I made or attempted to make quite an important point out of Justice Handley’s observations in the Donellan Case about the problem with the reasoning, we submit, about this finality tenet in D’Orta because of the many, many cases in the books involving actions for negligence against solicitors involved in litigation.

My learned friend, faced with that point, attempted to give it very short shrift and his response was to brush it off completely on the ground that he said solicitors now have immunity as a result of the decision in D’Orta.  There are a couple of problems with that.  The first is that the effect of D’Orta, as we discussed earlier, is not to give solicitors engaged in litigation a total immunity for all conduct and management of litigation.

There is a rump of cases that will be outside the immunity stated in D’Orta no matter how it is interpreted and in that rump of cases if action is brought against the solicitor, or for that matter an advocate, then inevitably that case will involve a reagitation of issues, a relitigation of what would have happened if the original case had proceeded without negligence.

The other aspect of it is that the existence of so many of those cases on the books, I submit, points up the fact that history is against my learned friend and against the decision, with respect, in D’Orta in saying that there is this fundamental tenet.  We submit, and have submitted before, and there was no response to this, that that line of cases shows, in short, that there is no such tenet.

Now, the second matter that I would like to raise is my learned friend ascribed to me a submission along the lines of not owning up to the fact that cases post D’Orta, in relation to settlement advice are against my client.  That is not my recollection of what I said.  What I said is that there were some in our favour and that there were some against and I referred in that regard to the decisions in the Court of Appeal – to some decisions in the Court of Appeal and those various decisions are referred to in paragraph 12 of our reply – I withdraw that.  Some of the decisions that are in our favour, post D’Orta, on settlement advice are in the last few lines of paragraph 12 of our reply.  So to suggest that there are no such cases, if that is what my learned friend was saying, is not correct.

The third matter I would like to respond to is what I will call the skewed litigation point.  My learned friend described this as a matter which this Court in D’Orta had described as important.  We would submit that the reference in paragraph 45 of D’Orta, if your Honours were to go to it briefly, is a very fleeting reference to that whole concept.  It certainly was not on any view a major part of the reasoning of this Court in the D’Orta Case in relation to upholding the immunity.

KEANE J:   Well, it actually says “the central justification for the advocate’s immunity”, paragraph 45.

MR REYNOLDS:   Paragraph?

KEANE J:   Paragraph 45 describes it as “the central justification for the advocate’s immunity”.

MR REYNOLDS:   Yes, your Honour.  I have mentioned those lines many times.  I have embraced it as part of my argument.  But this is the tenet or principle that controversies once resolved are not to be reopened.  I agree that is the central proposition.  My point is this notion just of skewing litigation is an aside rather than some key component in the argument.

KEANE J:   Well, it is not if one understands quelling litigation as being the quelling of litigation by a judicial decision, which might be thought to be what the Court was talking about at paragraphs 31 to 33, just as Justice McHugh talked about it in that sense.  That is to say that it is the actual judicial decision that is not able to be challenged collaterally - the judicial decision and the means by which it has been obtained, as opposed to a decision made by the parties independently of the court’s rulings – a decision made by the parties by agreement between themselves, and not because they have been subjected to the processes of government.

MR REYNOLDS:   Your Honour appreciates that is our first argument.  We embrace that in the sense that that is the way we submitted this test in D’Orta and any previous test should be interpreted, namely that there must be a collateral attack on the correctness of a decision of the Court – “decision” meaning a decision on the merits.  So, your Honour, I do not take issue with that concept. 

So far as skewed litigation is concerned, can I give your Honours a reference - I do not think your Honours have this on any list of authorities - to a decision, a very recent one, of the Victorian Court of Appeal in a case called Rosa v Galbally (2013) 42 VR 382. That was a case which involved an action against a solicitor in relation to settlement advice, but it would appear the immunity was not pleaded.

If your Honours wish to see a demonstration of why there is not skewing, your Honours only need read that case and see how the issues unfolded and how they were dealt with by that court.  It is not, I submit, a practical problem and if it were it is an issue which would have surfaced in one of the jurisdictions – and this was your Honour Justice Gordon’s point – where the immunity has either never existed, like United States and Canada, or in jurisdictions where the immunity no longer exists, namely, the United Kingdom and New Zealand.  This sort of problem would have loomed – whatever the problem is. 

The only thing that I would say in further response to what my learned friend said is that if one is talking about matters which are – to pick up what your Honour Justice Keane said – namely, unedifying – one has to factor this into the equation and that is someone conducting the negligence case against the advocate or solicitor is conducting that case in front of another judge.  Commonsense would suggest that that advocate conducting the case, the negligence case against the solicitor, would have in mind that raising matters which are utterly unedifying will probably not assist his client in persuading that particular judge to find in his client’s favour.

That, I suggest, is probably one of the reasons why this issue does not loom at all in any of these cases and if it had been a problem my learned friend would no doubt have pointed to the sort of alleged problem that has arisen and the difficulties that have been engendered.  It is not a practical problem and this is analogous, I respectfully submit, to a sort of floodgates style argument.

The fourth matter that I would like to raise apropos particular some of the observations that your Honour Justice Gordon made is simply to record that in the agreed facts at page 33 at line 11, it is an agreed fact that the ANZ Bank accepted – this is in open court:

that the debt due by the first plaintiff and Lord on the said guarantee was $1.5 million plus interest plus enforcement costs –

and that replicates what was in the statement of claim in the appeal book, page 4, line 35, and the defence at page 22, line 8, where the admission is made. 

The fifth point is this.  My learned friend, Mr Bell, seemed to make some sort of point about the word “subsisting” in the collocation “subsisting decision”.  The first argument that I put was that, picking up what Justice McHugh said in D’Orta, one has to read the plurality judgment as relating to an actual decision of the Court.  The talk about subsisting does not undercut that because there is a decision, it is just an extra epithet. 

But, in response to your Honours Justices Gageler and Nettle, I said – and I put this at the end of my argument – that the use of the word “subsisting” really shows the problem with finality, which was my third argument, namely, that there is no problem in relitigating if the decision has already been overturned by a court of appeal and there is none that exists.  So this point attaches to both the first and the third argument and occasions no difficulty with either of them.

Next, your Honours, my learned friend kept submitting that in relation to all of my arguments, D’Orta or Giannarelli or both have to be reopened.  I submit that the first two arguments which I put to your Honours clearly do not require reopening the correctness of D’Orta or Giannarelli.  They may involve some clarification of the tests which were adopted, but not overruling.

Next, can I respond to the suggestion that there was some terrible ambush in relation to the orders sought, namely, based upon the agreed facts.  This issue was canvassed in the submissions and it is in our reply at page 2, footnote 5, where it is pointed out that the status of the agreed facts may not be as clear as the respondent contends, referring to the decision in Bass v The Permanent Trustee. 

Your Honours, we have picked up on that line of authority and we have picked up on paragraph 26 of the Chief Justice’s judgment.  We do not wish to make any huge deal about it and we are happy to leave it to your Honours, but we felt we were obliged to raise the issue which was raised in Bass.

NETTLE J:   But JM overrode that, did it not?

MR REYNOLDS:   There is a well‑known page in Bass which quotes Lord Justice Diplock as he was in Fidelitas Shipping and that page says that where you have a separate trial, and this was a separate trial, on particular facts, that that creates a form of res judicata and that is the gist of what we were raising, both in that footnote and in relation to paragraph 26 of Chief Justice Bathurst and we felt that we should raise it.

GAGELER J:   You make no application to amend your notice of appeal to this Court, do you?

MR REYNOLDS:   No, your Honour, in the same way as from time to time, one might say, and I am sure I have said more than once, the orders which we have sought in the appeal book do not quite do the trick.  You need to make orders for the following effect but again, the fact that I am not making an application underlines the fact I am really just raising this as a matter which we feel that we ought to raise with your Honours.  We were proceeding on the basis of what the Chief Justice said and I am happy to leave it there.

My learned friend, Mr Lancaster, raised - as did my learned friend, Mr Bell - they kept coming back to an observation that your Honour the Chief Justice made when I was on my feet in‑chief about finality being a broader concept than correctness of decision, as though I was General Gordon at Khartoum and your Honour the Chief Justice had put that as a spear through my chest.  I do not understand, with respect, the relevance of this.  We have conceded that this challenged - the tenet of finality as has been described is way too wide and it is obviously way wider than the notion of correctness of decision and nobody could possibly dispute that and nor do I.

Your Honours, the final point that I would make is simply this.  It is said in the third part of my submissions that I would give my learned friend, Mr Bell, some numbered propositions which would make it easy for him to respond on the 14 points I put on reopening and reconsideration.  My respectful submission is that it is very revealing that my learned friend made his response to those points with such a light touch.  Your Honours, if the Court pleases, those are my submissions.

FRENCH CJ:   Yes, thank you, Mr Reynolds.  The Court will reserve its decision.  The Court adjourns to 9.45 tomorrow morning for pronouncement of orders.

AT 4.55 PM THE MATTER WAS ADJOURNED