Attwells & Anor v Jackson Lalic Lawyers Pty Limited

[2015] HCATrans 176

[2015] HCATrans 176

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S57 of 2015

B e t w e e n -

GREGORY IAN ATTWELLS

First Applicant

NOEL BRUCE ATTWELLS

Second Applicant

and

JACKSON LALIC LAWYERS PTY LIMITED

Respondent

Application for special leave to appeal

BELL J
GAGELER J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 AUGUST 2015, AT 10.37 AM

Copyright in the High Court of Australia

MR R.D. NEWELL:   If it please your Honours, I appear for the applicants on the appeal.  (instructed by L.C. Muriniti & Associates)

MR A.S. BELL, SC:   If it please the Court, I appear with my learned friend, MR P.C. SILVER.  (instructed by Sparke Helmore Lawyers)

BELL J:   Yes, Mr Newell.

MR NEWELL:   Your Honours, this is the appeal before your Honours, or the application, it concerns a matter which is plainly of great public significance.  If there is a question that would have to be addressed in terms of special leave questions it is the question of whether the time has come to reconsider the decision in D’Orta.  It would be my submission that the time has come.

The appeal is based on ‑ before I take your Honours to the peculiar facts of the case – first, an alleged error of law on the part of the Court of Appeal in determining the matter there and, secondly, a claim for reconsideration of the principles by which the advocates’ immunity is applied.  Those two matters are related because, of course, if we are wrong about the error of law then the reconsideration would be necessary, but a thorough consideration given the doubts about the relationship between the decisions being made by the State Supreme Courts and the text of D’Orta a reconsideration appears to be called for for the sake of clarity in any event.

GAGELER J:   What you call the “error of law”, how do you crystallise that?

MR NEWELL:   Your Honour, we say that the error of law is in the application of the advocates’ immunity to negligently advised settlements in contradistinction to judicial proceedings determined upon the merits either by a jury verdict or by a judge.

GAGELER J:   This is Justice McHugh’s point in D’Orta.

MR NEWELL:   In the High Court?

GAGELER J:   Yes.

MR NEWELL:   Well, yes, I say it is the plurality’s point as well but, yes, it is Justice McHugh – it falls plainly from Justice McHugh, a matter that has not been given sufficient weight in the application of the law.  The facts of this case are interesting if for no other reason that they have a haunting similarity to the facts of Chamberlains v Lai, the case which led to the abolition of the advocates’ immunity in New Zealand in 2006.  The peculiar similarities are remarkable.

In this case, just as in Lai, the appellants were caused to incur a liability double that which as a matter of the worst application of law against them in the case before the court could have befallen them.  In this case, the first applicant – I will not go through the details of the parties – was caused to sign terms of settlement which required him to pay first $1,750,000 provided it was paid by 19 November 2010, but a sum in excess of $3,300,000 if there was default in that obligation.

BELL J:   You can take it, Mr Newell, that we are generally aware of the facts.

MR NEWELL:   The matter was sent by order of her Honour Justice Schmidt of the Supreme Court for determination of a separate question.  His Honour Justice Harrison was reluctant by reason of what he saw as an egregious error to determine the separate question.  His Honour was held to be in error by the Court of Appeal which determined that the reasons he gave for declining to answer the separate question were irrelevant.  The Court of Appeal applied the intimate connection test on the basis that there was an intimate connection between the work done and the settlement of the proceedings.

BELL J:   And it is the application of that test that you say involves a misapprehension of D’Orta, is that right?

MR NEWELL:   That is correct, your Honour.

BELL J:   Yes, all right.

MR NEWELL:   If we are wrong in that, the law should be reconsidered.

BELL J:   Yes, yes.

MR NEWELL:   Now, the point ‑ ‑ ‑

BELL J:   Mr Newell, I think at this point it might be convenient if we heard from Dr Bell.

MR NEWELL:   As your Honour pleases.

MR BELL:   If it please the Court, there was no misapprehension or misapplication of D’Orta whatsoever.

BELL J:   Accepting that for the present, Dr Bell ‑ ‑ ‑

MR BELL:   Yes, your Honour.

BELL J:   ‑ ‑ ‑ just when one looks at some of the statements in Lai v Chamberlains ‑ ‑ ‑

MR BELL:   Your Honour, Lai v Chamberlains, of course, is the only relevant fact which has changed since D’Orta.

BELL J:   Well, it is perhaps of some significance that the Supreme Court of New Zealand took a view at paragraph [80] of the joint reasons that:

Although consistency with Australian law may have been a more important consideration if the matter had been evenly balanced, we consider that the answer as a matter of New Zealand law is clear cut.

MR BELL:   But, your Honour, what one has is this.  What one has is the Court in Giannarelli exhaustively considering the matters, including the public policy arguments against the immunity.  We do not run away from those.  There are policy arguments both ways, but they were squarely confronted in Giannarelli and worked through and Giannarelli stood.  Then you had D’Orta.

BELL J:   D’Orta involved a considerable reduction of the justifications, did it not?

MR BELL:   I do not accept that.  In fact, it involved a reaffirmation of the test – an exact reaffirmation of the test.  The ratio of D’Orta is to reaffirm the test in Giannarelli and the test in Giannarelli is squarely satisfied in this case.  So what you had ‑ ‑ ‑

BELL J:   It reaffirmed the test.  The matter that I am directing attention to, which again was the subject of some observations in Lai v Chamberlains, was that the principled justification for the test in D’Orta comes down strongly to finality ‑ ‑ ‑

MR BELL:   Yes.

BELL J:   ‑ ‑ ‑ and that represents, if you like, a compression of the principles underlying the ‑ ‑ ‑

MR BELL:   But what is critical is that the test did not alter in terms and that is made plain in the plurality judgment in D’Orta.  So what you have, you have Giannarelli; full consideration of the arguments both ways, the history, the policy arguments, et cetera.  You have D’Orta; secures a grant of leave in the context of what was said to be some legislative changes in Victoria, and also the then very recent decision of the House of Lords in Hall v Simons. 

Again, an exhaustive consideration, and far from Giannarelli being undermined, Giannarelli affirmed by six members of the Court, a plurality of four then separately Justice McHugh and Justice Kirby.  In the context of Justice McHugh ‑ ‑ ‑

GAGELER J:   It is paragraph 166 that troubles me.

MR BELL:   Yes.  The paragraph of Justice McHugh I was going to refer your Honour to was 154 because one of the very examples he gave by reference to authority in 154 is negligently advising a settlement.  One of the very examples he gave of that which falls within the immunity he was affirming.

GAGELER J:   What about 166, second sentence?

MR BELL:   Well, that would seem to be inconsistent with what he has said in the earlier part, to be candid.

GAGELER J:   Yes, but a difficulty is that it appears to be inconsistent with what he earlier said, but he appears to say in 166 that what he is there saying is consistent with the view being expressed in the plurality.

MR BELL:   Well, with the greatest respect, your Honour, that is a single judge.  You have a plurality reaffirming Giannarelli and the case squarely falls within Giannarelli.  Now, this of course was a settlement which occurred not before the commencement of litigation, not before the commencement of the trial, but mid‑trial, and which resulted, let it be remembered, in a judgment – not a discontinuance but in a judgement of the court which is juridically of no different kind to a judgment supported by reasons or not.  The judgment of the court is the order of the court and an order of the court was made. 

As Chief Justice Bathurst pointed out, that finality would be undermined by this claim, as would – and all of the sorts of considerations – the importance of using compromise – one can draw examples from whole areas of the law – using compromise to encourage settlement and bringing expensive public and private expensive litigation to an end.  Finality is undermined if settlements achieved in the course of litigation can be undermined and, of course, when one looks at and when one has to unpack the reasons for settlement – was it because of perceptions of a judge’s erratic behaviour, was it because of perceptions of views the judge appeared to be forming, et cetera.  What were the forensic considerations that led to the advice?  They are all the sorts of fundamental reasons that informed the plurality at least in D’Orta.

So what we have is this. We have Giannarelli, then we have D’Orta.  So you have our friends having to overcome what we would say are three hurdles.  The usual special leave hurdles, secondly, the hurdles associated with the jurisprudence in this Court, John v Commissioner of Taxation, Wurridjal, about the very real concern this Court has in reopening – the jealousy this Court has, proper jealousy, in reopening recent decisions.  But it is compounded in this case because the decision which is really sought to be reopened is Giannarelli, as affirmed in D’Orta.  That has already been exceptionally reopened once and affirmed. 

So what does one get out of the New Zealand development?  Well, there are several.  We have looked at D’Orta and we have looked at Hall and we are going with the Hall view.  The High Court of Australia, seven different judges 10 years ago looked at it but we do not agree with them, and then it does undermine respect for the administration of justice and rule of law of this country if a differently constituted High Court not more than 10 years later says it is all open for reconsideration and all that has changed relevantly is another court has looked at the matter.

Well, another court had looked at the matter at the time of D’Orta, the House of Lords, and that was considered thoroughly.  The other point about Chamberlains, of course, and why the Court should be very cautious about Chamberlains, with respect to the Supreme Court of New Zealand, they replaced the immunity by creating a brand new law in respect of abuse of process.

Their Honours said it would be presumptively abusive to start professional negligence litigation after there has been a settlement or a resolution.  Now, that is just lawmaking.  That is for the legislature.  This issue has been around live in Australia since Giannarelli and then again by D’Orta.  If ever there was a matter which the High Court having looked at the matter twice thoroughly is a matter which if it was appropriate for legislative intervention could be the subject of legislative intervention it is this.  It is undermining this Court’s – we would put the submission consistent with what, for example, Chief Justice French said in Wurridjal, just to quote him:

a strongly conservative cautionary principle, adopted in the interests of continuity and consistency in the law –

that was his phrase and it has been picked up by other judges since, and then quoting Justice Gibbs in the Second Territory Senators Case:

no Justice of the Court is entitled to ignore the previous decisions and reasoning of the Court and arrive at his or her own judgment as though the pages of the law reports were blank.

There are profound conceptual and good reasons, strong reasons why this Court will not routinely allow its recent decisions – particularly recent decisions – and, of course, different considerations appear for constitutional matters, but this is not that kind of matter.  The jealousy or the protection of previous decisions is not as strong in constitutional matters for obvious reasons.  We are not in that territory.

So this case is a fortiori, in our submission.  The usual problems are there, the usual hurdle is there, but compounded by the fact of D’Orta and we would submit relevantly no relevant change other than the fact that certainly a well‑respected appellate court has taken a different view but a very well‑respected appellate court had taken a different view at the time of D’Orta.

GORDON J:   What do we do about the West Australian authorities?

MR BELL:   Which particular ‑ ‑ ‑

GORDON J:   The ones which cast doubt upon some aspects of this immunity, do we ignore those?

MR BELL:   Well, they are not authorities of this Court.  This Court has stated the law, your Honour, and stated the law with great clarity.  This Court itself, your Honour and Justice Nettle, earlier this week and your Honours Justice Bell and Justice Gageler in May of this year have declined to reopen the immunity.  Those two decisions – the decision earlier this week was the Nikolaides Case and the decision that your Honours Justice Bell and Justice Gageler disposed of was the case from Young v Hones, that was special leave disposition 73 on 6 May of this year.

BELL J:   I think the most recent occasion was an occasion when it was said it was not a suitable vehicle to consider the ‑ ‑ ‑

MR BELL:   Yes.  Well, your Honour, what is it that makes this vehicle any more suitable than those?  Nothing could be ‑ if one takes the operative language of Giannarelli as reproduced in the opening page of D’Orta either:

in the conduct of a case in court or for work done out of court which leads to a decision affecting the conduct of the case in court.

What could be more squarely within that second strand than a mid‑trial advice to settle?  Now, one can imagine leave being granted in cases on the cusp, but this is not anywhere near the cusp, in my respectful submission, at all.  I accept that D’Orta was a criminal context, or a criminal antecedent.  This is not, but Giannarelli was a civil case.  The law has been applied in this country without legislative intervention for 30 years – close to 30 years since Giannarelli, just under 30 years I think since Giannarelli.

This case – our friends would need to overcome the John v Commissioner of Taxation line of country, the strong cautionary principle, and all that really can be pointed to is the decision of the New Zealand Supreme Court, nothing more.  The other matters our friends refer to in their written submissions are instances of the application of Giannarelli and D’Orta, and our friends make the point they lead to a measure of injustice.  That is the policy consideration which exercised the Full Court in Giannarelli and in D’Orta.  It is the predicate of an immunity.  Without that, one is not in the territory, so that does not provide any additional matter.

Your Honour, in terms of case law in respect of settlements, Chief Justice Bathurst in his decision made reference to a long line of cases where – if one goes to his Honour’s judgment, a long line of cases where in paragraph 39 one of those cases, your Honour ‑ paragraph 39, the cases there, and in one of those cases, your Honour, five members of the New South Wales Court of Appeal sat and found that advice in respect of the settlement of litigation was squarely within the immunity. 

The other case of Donellan v Watson which his Honour referred to at 44 to 46, that was a case where there was an action available but on a different basis.  What is relevant, Justice Handley – and we would submit the better view of it is it was really a breach of warrant of authority case, somebody settling without proper instructions, but what the Chief Justice noted was the observation of Justice Mahoney – Justice of Appeal Mahoney as he then was – this is about six lines under 44:

ordinarily, compromise, even if the consensus be reached out of court, is within the advocates’ immunity.

So not only is the general immunity, we would say, embedded in our common law, but the application of the immunity to compromises of proceedings mid‑litigation is equally embedded in that already embedded principle.  This is a matter for the legislature, your Honour.

GAGELER J:   Well, Mr Bell, the cases referred to in paragraph 39 of his Honour’s judgment start with Biggar v McLeod.

MR BELL:   That is so.

GAGELER J:   That is the one authority that is cited in Justice McHugh’s judgment in paragraph 154 for the proposition that the immunity extends to the negligent advising of a settlement. 

MR BELL:   Yes.

GAGELER J:   The one authority before D’Orta that is picked up.

MR BELL:   Well, it is the one authority he cites but the point of my reference to paragraph 44 is that there are other authorities before and since of strong intermediate appellate courts which take the principle and apply it to compromises.  Now, I accept his Honour cited one authority and it was a New Zealand authority and the status of that authority in New Zealand post‑Lai v Chamberlains obviously has changed.  However, there were other authorities his Honour could have cited, authorities of Australian intermediate courts, which support the proposition.

When one looks at the crystal statement of principle in Giannarelli as affirmed in D’Orta which also draws on the well‑known observation of Chief Justice Gleeson in Keefe v Marks when he was Chief Justice of this State, what is intimately connected with litigation?  Nothing could be more intimately connected with litigation than advice mid‑trial about how it is going and what the prudent thing to do would be for all of the sort of forensic reasons playing on the advisers and affecting the event which is the trial.  So, your Honour, it would be a very, very major step at odds, we say, with the line of authority of John v Commissioner of Taxation, et cetera ‑ ‑ ‑

BELL J:   I think you have made that point, Dr Bell.

MR BELL:   ‑ ‑ ‑ yes, for the Court to grant leave in this case.  We also submit – well, that is the submission we make, your Honour.

BELL J:   Yes, thank you.  Yes, there will be a grant of special leave in this matter.  The likely estimate, Mr Newell?  There will be a grant of special leave, likely estimate one day?

MR NEWELL:   Of the hearing itself, your Honour?

BELL J:   Yes.

MR NEWELL:   I would have said two days, I am sorry.

BELL J:   Dr Bell?

MR BELL:   Your Honour, maybe one day plus, maybe one day and a little.  We take it, your Honour, that the grant of special leave does not decide the question of whether leave to reopen Giannarelli is resolved.  We would take the view, with respect, that that is a matter for the Full Court and we would certainly anticipate making that argument first.  When I say first, as a threshold argument in our submissions on an appeal, and certainly if that analysis be right that the leave to reopen is for the Full Court rather than the special leave Court, which I think is consistent with authority ‑ ‑ ‑

BELL J:   And I think also there is an issue about whether there is a requirement for leave.

MR BELL:   Yes.

BELL J:   I understand what you are saying, Dr Bell.

MR BELL:   Yes, so given that, I would say it ought to be able to be done in one day but one day plus, one day with a potential for a short spill over may be appropriate.

BELL J:   Yes, very well.

MR BELL:   There may also – I do not know this but it is the kind of case where it may be that some of the professional associations may seek leave to intervene.  I do not say that with any knowledge but it may be.

BELL J:   Yes.  Well, the directions in terms of the filing of submissions can be obtained from the Registrar and the parties are reminded of the importance of adhering to the timetable.  The likelihood I think at this stage is of a date in November.

MR BELL:   If it please the Court.

BELL J:   Yes, very well.  The Court will adjourn to reconstitute.

AT 11.03 AM THE MATTER WAS CONCLUDED