Ballantyne v Boylan - [2013] SASC 177

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BALLANTYNE & ANOR v BOYLAN & ANOR
[2013] SASC 177
Judgment of The Honourable Justice Anderson
14 November 2013
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - SUMMARY JUDGMENT
PROFESSIONS AND TRADES - LAWYERS - DUTIES AND LIABILITIES - LIABILITY FOR COSTS OF PROCEEDINGS
RECOVERY OF COSTS AS DAMAGES IN SUBSEQUENT ACTION
Application by first defendant to strike out claim against him for damages and other relief. The plaintiffs seek to claim costs of prior proceedings from the defendant, alleging negligence and breach of duty on behalf of the defendants. The first defendant seeks to strike out or permanently stay the claim on the basis both the parties and issues in each action are identical. The plaintiffs allege the parties are represented in different capacities in the two actions, and the issues differ.
Held: Application refused. The parties are appearing in different capacities in the current action and the issues in question are not the same.
Gray v Sirtex Medical Ltd (2011) 276 ALR 267, applied.
Ballantyne v Ballantyne & Ors [2010] SASC 273; Anderson v Bowles (1951) 84 CLR 310; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, discussed.

BALLANTYNE & ANOR v BOYLAN & ANOR
[2013] SASC 177
Civil

ANDERSON J.
Introduction
In this application the first defendant seeks an order to strike out the claim brought by the plaintiffs for damages and other relief relating to the costs of prior Supreme Court proceedings.
The plaintiffs, Mr Lee Ballantyne (“Lee”) and Mr Robert Scott Ballantyne (“Scott”), have brought an action against two solicitors, Mr Paul Boylan and Ms Marion Kitto, alleging the two defendants were negligent and breached their duties in the course of preparing estate planning documentation for the family of the plaintiffs. The plaintiffs were previously involved in an action regarding the interpretation of certain deeds and the effect of those deeds on family estates and assets. This action was decided by White J: see Ballantyne v Ballantyne & Ors [2010] SASC 273. His Honour gave reasons for his order on costs. He specifically rejected an argument by the first and second defendants that the sixth defendant (Mr Boylan) should pay the whole or part of the costs of the plaintiff or the first five defendants. His Honour, after considering Mr Boylan’s application for costs, made no order. It was ordered that the plaintiff and first five defendants recover their costs on a solicitor/client basis from the trust.
The plaintiffs, as trustees of the fund, are now seeking to recover the costs of $336,000 from the defendants in this action.
Background
The action arises as a result of a previous dispute between the Ballantyne family members as to the present ownership of farming land near Gladstone. In that action, the first and second defendants (the first and second plaintiffs in this action) contended certain land was held by the Robert Peter Ballantyne Family Trust…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ballantyne v Boylan

Details

AGLC: Ballantyne v Boylan [2013] SASC 177
Case: [2013] SASC 177
Decision Date: 14 November 2013

CaseChat Overview and Summary

The case of Ballantyne v Boylan involves a dispute between the plaintiffs, Lee and Scott Ballantyne, who now act as trustees of the Robert Peter Ballantyne Family Trust, and the defendants, Mr Boylan, a solicitor, and Ms Kitto. The plaintiffs seek to recover costs of $336,000 incurred from a previous action concerning the ownership of farming land near Gladstone. The previous action involved disputes over the validity of a Deed Poll executed by Mr Boylan, which the plaintiffs now allege was altered by him or someone at his firm. The present action focuses on claims of professional negligence against Mr Boylan and Ms Kitto, including allegations of failure to advise on the potential capital gains tax consequences and causing the plaintiffs to incur costs and tax liabilities.

The court had to decide on the validity of the plaintiffs' claims for costs against the defendants in light of the previous action. The primary legal issues were whether the plaintiffs' claims were barred by the doctrines of estoppel and abuse of process due to the different capacities of the parties in the two proceedings and whether it was an abuse of process for the plaintiffs to choose not to litigate the issues of professional negligence in the previous proceedings. The court also had to consider whether the plaintiffs' claims were hypothetical, depending on the outcomes of the previous proceedings.

The court found that the plaintiffs' claims were not barred by estoppel or abuse of process. The judge held that the parties appeared in different capacities in the two sets of proceedings, with the plaintiffs now acting as trustees and the defendants in their professional capacities as solicitors. The court ruled that the issues of professional negligence were not relevant to the earlier proceedings and that it was not an abuse of process for the plaintiffs to litigate these issues separately. The court further held that the plaintiffs had good reasons not to include the professional negligence claims in the previous action, as doing so would have unnecessarily complicated and expanded the scope of that action. The application to strike out or stay the proceedings was dismissed, and the matter was set for trial.

ORDERS:
The application to strike out or stay the proceedings was dismissed. The case will proceed to trial.

Orders

Orders of the court

Held: Application refused. The parties are appearing in different capacities in the current action and the issues in question are not the same.

Background

Background to the litigation

The plaintiffs, as trustees of the fund, are now seeking to recover the costs of $336,000 from the defendants in this action.Background The action arises as a result of a previous dispute between the Ballantyne family members as to the present ownership of farming land near Gladstone. In that action, the first and second defendants (the first and second plaintiffs in this action) contended certain land was held by the Robert Peter Ballantyne Family Trust (“the Trust”) of which they were trustees. Their four siblings contended some of the land was vested in Lee, some in Scott and the remainder formed part of their mother’s estate, to be distributed in accordance with her will. Mr Boylan’s firm prepared the Deed of Settlement establishing the Trust and a later Deed Poll intended to vest property owned by the Trust. He was named as the sixth defendant in the action, as a large part of the proceedings concerned a dispute about the validity of the Deed Poll. It was alleged by Lee and Scott Ballantyne that the Deed Poll did not contain certain words when executed by Mr Boylan and the parents, Robert and Valmai Ballantyne, on 13 April 1999. They submitted it was later altered so as to introduce certain words into a clause without re-execution of the Deed or under the amendment powers contained in the deed. If the Deed Poll was found to be invalid, all property to which it referred would remain an asset of the Trust controlled by Lee and Scott. Mr Boylan, the sixth defendant, adopted a position of neutrality concerning the issue of validity of the Deed Poll, and he withdrew from further participation in the trial as Lee and Scott gave an undertaking that there would not be an allegation in the trial the Deed was altered by him or someone at his firm. White J concluded that the relevant clause (clause 6.1), did not contain the disputed words when executed by the parents and these words were added at some point after, and therefore those words could not be relied upon to establish the validity of the Deed Poll of 13 April 1999. However, His Honour found for other reasons that the clause nevertheless authorised the vesting of Trust assets in the beneficiaries.The present action Lee and Scott, now as the plaintiffs in this matter, have commenced action against Mr Boylan and Ms Kitto, to recover the costs of the previous action by way of damages. The plaintiffs allege that Mr Boylan, or someone employed by him, removed the page from the Deed and replaced it with an amended page. They allege that both defendants have breached their duties in a number of ways, including failing to advise that control of the land could be passed to the trustees, preparing the Deed Poll without advising the trustees of potential capital gains tax consequences and causing the plaintiffs to incur considerable costs defending the first action, in addition to capital gains tax liabilities. The plaintiffs allege the defendants further failed to impart certain information about the Trust and Deed Poll, and failed to give adequate advice in regards to actions to be taken for the Trust. In short, they are suing for the professional negligence of the solicitors.Interlocutory application

Evidence

Evidence Before The Court

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Decision

Reasons for decision

ANDERSON J

In regards to the estoppel and abuse of process assertions, Mr Doyle repeats his submission that the parties appear in two different capacities in the two sets of proceedings. He submits the issues to be litigated in this present action were largely not relevant to the earlier proceedings, in that it was not relevant to determine whether Mr Boylan owed and breached a general duty of care to the former trustees. Mr Doyle further submitted that even if the earlier proceedings could have been expanded to include such issues, it was not an abuse of process for the plaintiffs in the present action to choose not to litigate them. He submitted there was, in fact, good reason not to raise those issues, given they would complicate the previous proceedings and would involve a number of parties not necessary to the matters in dispute in those proceedings. Additionally, Mr Doyle submitted the issues in the present proceedings were hypothetical, depending on how the issues in the prior proceedings were determined. He asserts there is no risk of re-litigation, and therefore no abuse of process.Conclusion In my view the submissions made by Mr Doyle on both limbs of Mr Blight’s argument are correct. The rule in Anderson only operates where there are successive sets of proceedings involving the same parties. I consider that this is not such a case because the parties are appearing in quite different capacities in this matter. Mr Boylan was joined in the previous proceeding in his capacity as the settlor of the Trust. The plaintiffs in that action were joined as beneficiaries of the trust. They are now suing in their capacities as trustees while Mr Boylan is defending himself in his capacity as a solicitor. Clearly, different issues arise out of the respective duties and obligations of a settlor on the one hand and solicitor on the other. Questions of professional negligence amongst other issues now arise for the first time. In my view this is an exception to the Anderson rule, in that the changed capacities of the parties bring it within the Gray v Sirtex exception for third parties. In relation to the submission of Mr Blight regarding the Anshun principle, the court said in Ashun at [61]:... there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings, e.g. expense, importance of the particular issue, motives extraneous to the action litigation, to mention but a few. In my view, it was not unreasonable to not include the issues in the present action in the previous action. As Mr Doyle submitted, such inclusion would have unnecessarily complicated those proceedings and involved a number of parties who would not otherwise be included in that action. The action would have become more complicated an expensive and justified the plaintiffs from refraining from litigating these issues in the previous proceedings. It is my view that there is not, in this case, any breach of the general rule requiring finality in litigation. The application to strike out or stay these proceedings by the first defendant is dismissed. I will hear the parties as to the future conduct of the matter to trial.

Ratio Decidendi

Legal Principle Established

Established by: ANDERSON J

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