Beri Distributors Pty Ltd v Mossensons Pty Ltd - [2022] WADC 30

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   BERI DISTRIBUTORS PTY LTD -v- MOSSENSONS PTY LTD [2022] WADC 30
CORAM:   GILLAN DCJ
HEARD:   13-16 SEPTEMBER 2021
DELIVERED          :   29 MARCH 2022
FILE NO/S:   CIV 1949 of 2018
BETWEEN:   BERI DISTRIBUTORS PTY LTD
First Plaintiff
ANTONIO DI PAOLO
Second Plaintiff
AND
MOSSENSONS PTY LTD
Defendant
BRIAN PHILIP WHEATLEY
Third Party

Catchwords:

Action in negligence - Recovery of fees paid to solicitor for negligent work in conduct of litigation

Legislation:

Civil Liability Act 2002 (WA)
Law Reform (Contributory Negligence and Tortfeasor's Contribution) Act 1947 (WA)

Result:

Plaintiffs succeed against defendant and recovery of fees paid ordered
Defendant's claim against third party dismissed

Representation:

Counsel:

First Plaintiff	:	Mr H R Robinson and Mr P Lachore
Second Plaintiff	:	Mr H R Robinson and Mr P Lachore
Defendant	:	Mr H Schoombee
Third Party	:	Mr P G McGowan

Solicitors:

First Plaintiff	:	Haydn Robinson
Second Plaintiff	:	Haydn Robinson
Defendant	:	Mossensons
Third Party	:	Brian Wheatley

Case(s) referred to in decision(s):

Alpine Holdings Pty Ltd v Feinauer [2008] WASCA 85
Artahs Pty Ltd v Gall Standfield & Smith (a firm) [2012] QCA 272
Astley v Austrust Ltd [1999] HCA 6; (1999) 197 CLR 1
Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16; (2016) 259 CLR 1
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 5] [2016] WASC 263
Blyth v Fladgate [1891] 1 Ch 337
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Breen v Williams (1996) 186 CLR 71
Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282
Cachia v Isaacs (1985) 3 NSWLR 366
Canberra Formwork Pty Ltd v Civil & Civic Ltd (1982) 41 ACTR 1
Capebay Holdings Pty Ltd v Marks Healy Sands [2002] WASC 287
Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd [2018] NSWCA 213
CFMEU v Commonwealth of Australia [1999] FCA 1571
Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232
Clairs Keeley (a firm) v Treacy [No 3] [2005] WASCA 86
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348
Dillingham Constructions Pty Ltd v Steel Mains Pty Ltd [1975] HCA 23; (1975) 132 CLR 323; (1975) 6 ALR 171
D'Orta‑Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1
Dyczynski v Gibson [2020] FCAFC 120
Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36
Eshelby v Federated European Bank Ltd [1932] 1 KB 254
Eshelby v Federated European Bank Ltd [1932] 1 KB 423
Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773
Giannarelli v Wraith (1988) 165 CLR 543
Hawkins v Clayton (1988) 164 CLR 539
Hill v Featherstonhaugh (1831) 7 Bing 569
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75
Keefe v Marks (1989) 16 NSWLR 713
Kendirjian v Lepore [2017] HCA 13; (2017) 259 CLR 275
Lewis Blyth and Hooper v Dennis [2007] WASC 177
Lidden v Composite Buyers Ltd (1996) 67 FCR 560
Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555
Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522; (1985) 59 ALR 722
March v E & M H Stramare Pty Ltd [1991] HCA 12 ; (1991) 171 CLR 506
Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340
Netglory Pty Ltd v Caratti [2013] WASC 364
Nigam v Harm [No 2] [2011] WASCA 221
Ogilvie v Adams [1981] VR 1041
Pegrum v Fatharly (1996) 14 WAR 92
PNJ v The Queen [2009] HCA 6; (2009) 252 ALR 612
Purkess v Crittenden (1965) 114 CLR 164
Re Massey & Carey (1884) 26 ChD 459
Re Windeyer, Fawl & Co; Ex parte Foley (1930) 31 SR (NSW) 145
Rondel v Worsley [1969] 1 AC 191
Ryan v Hansen t/as Hansens Solicitors [2000] NSWSC 354; (2000) 49 NSWLR 184
Sims v Chong [2015] FCAFC 80; (2015) 321 ALR 509
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76; (2017) 55 WAR 36
Steindl Nominees Pty Ltd v Laghaifar [2003] QCA 157; [2003] 2 QdR 683
Strong v Woolworths Ltd t/as Big W [2012] HCA 5; (2012) 246 CLR 182
Studer v Boettcher [2000] NSWCA 263
The Commissioner of State Revenue v Aidlaw Pty Ltd (No 2) [2010] VSC 405
Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270
Van der Velde v Halloran [2011] WASCA 252
Victoria International Container Terminal Ltd v Lunt [2021] HCA 11; (2021) 95 ALJR 363
VL Finance Pty Ltd v Legudi [2003] VSC 57; 54 ATR 221
Voli v Inglewood Shire Council (1963) 110 CLR 74
Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375
Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233
Watts v Rake (1960) 108 CLR 158
Weller v Phipps [2010] NSWCA 323
Wigan v Edwards (1973) 1 ALR 497; (1973) 47 ALJR 586

GILLAN DCJ:

The plaintiffs have brought this action against the defendant to recover legal costs paid by them to the defendant. The plaintiffs claim that the defendant breached the retainer agreements which they each had with the defendant or, alternately, was negligent by failing to exercise reasonable skill, care and diligence in providing legal services to the plaintiffs in respect to debt recovery actions in this court.
The plaintiffs allege that they got no benefit at all from the legal services provided. The first plaintiff seeks to recover the sum of $282,461.05 paid to the defendant by way of legal fees plus the sum of $337.40 paid to discharge a caveat together with interest. The second plaintiff seeks to recover the sum of $5,526.73 paid to the defendant by way of legal fees together with interest. The plaintiffs seek their costs of the proceedings on an indemnity, alternatively, on a party/party basis and such further or alternative orders as the court deems appropriate.
The defendant denies that it failed to exercise reasonable care, skill and diligence in the provision of legal services to the plaintiffs and in its defence relies on arguments relating to, inter alia, the quality of the instructions it received and on advocate's immunity to shield it from action.
Further, in the event that the plaintiffs are successful against it, the defendant has commenced third party proceedings against its employed solicitor, Mr Wheatley, asserting negligence in the discharge of his duties to the defendant in the course of him performing legal work for the plaintiffs and seeking damages, further or alternative relief and costs.
In respect to the action, for reasons set out below I find in favour of the first plaintiff in the sum of $282,467.05 and the sum of $337.40 and for the second plaintiff in the sum of $3,476.73. I will hear the plaintiffs on interest.
In respect to the third party claim. For reasons set out below I find in favour of the third party and dismiss the defendant's third party claim.

The facts

Without intending any disrespect, I intend to refer to relevant individuals by their first names throughout these reasons. I will also refer to another solicitor employed by the defendant by the identifier CR.[1]
[1] CR was a solicitor employed by the defendant who, at all material times worked under the direct supervision of Mr Mossenson. CR played no part in the proceedings and hence was unable to raise matters by way of defence or evidence with respect to the role CR played.
In a broad sense, the parties seem to have considered that the facts were relatively uncontentious between them and they have left this matter to be determined largely on the documentary evidence. I heard the evidence of only one witness, Lina Settineri (Lina) for the plaintiffs. Lina was cross-examined on limited matters.
No witnesses were called by the defendant and, no doubt for that reason, the third party did not give evidence.
Following are my general findings of fact.
The first plaintiff is a company and the second plaintiff Antonio Di Paolo (Tony) was at all times one of four directors of the first plaintiff. The first plaintiff was a family-owned company which carried out business related to the supply of plumbing fixtures.
Tony was acquainted with two women, Joanna Barbara Rose (Joanna) and her mother, Maureen Lucille Rose (Maureen).
In the period between 22 November 2010 and 23 July 2014, Tony variously allowed Joanna to obtain goods on credit from the first plaintiff (the trade debt), provided the use of a secondary personal credit card to Joanna and caused the use of the first plaintiff's funds in payments to that credit card, by the issue of cheques or by other payment methods to pay third parties and drew cash from the first plaintiff's account for the benefit of each of Joanna and Maureen. He also provided a fuel card to Joanna.[2] For the purpose of the resolution of this action, it is not necessary for me to set out in detail exactly how and how much of the first plaintiff's or Tony's funds were used.
[2] It is not clear if the first plaintiff or Tony was responsible for payment of the fuel card.
Prior to August 2014 the other directors of the first plaintiff did not know about Tony's use of the first plaintiff's funds. In August 2014, the other directors and two other of Tony's siblings, Lina and Bruno Di Paolo (Bruno), became aware of the trade debt in Joanna's name and of the direct use of company funds totalling, they understood, to be $160,000 for the benefit of Joanna (less $19,000 repaid by instalments) and $110,000 for the benefit of Maureen.[3] It took some time and investigation before the full extent of the unauthorised funds utilised was discovered.
[3] Exhibit 1, pages 46 - 47.
On 21 August 2014 Lina and Bruno, met with CR, a solicitor employed by the defendant to seek advice from the defendant, inter alia, with respect of the recovery of the trade debt and the funds in the sum referred to in [14] from Joanna and Maureen.[4] Neither Lina or Bruno were then directors of the first plaintiff although Lina later became a director but nothing turns on this for the resolution of these proceedings.
[4] Exhibit 1, pages 46 - 47.
Tony signed a note that day which relevantly stated 'I hereby confirmed that monies to Maureen Rose and Joanne [sic] Rose both of [address] were loans to them to be repaid to Beri Distributors Pty Ltd (Beri) on the sale of the properties at … Lot 406 Eleventh Road Hilbert and ... 260 Jess Road Bullsbrook'.[5] The note was provided to the defendant by email after the meeting between Lina, Bruno and CR.[6]
[5] Exhibit 1, page 45.
[6] Exhibit 4, pages 1 - 2.
It was common ground at the trial of this action that at all material times the Jess Road Bullsbrook property (the Jess Road Bullsbrook property) was owned by Maureen in her personal capacity and prior to any proceedings being commenced was on the market.[7] Further, the Lot 406 Eleventh Road Hilbert property (the Hilbert property) was owned by Maureen as Executor of the Will of Elsie Agnes Miller and that under the terms of that Will Maureen was a beneficiary but not the sole beneficiary.[8] The defendant was aware that Maureen owned the property as executor prior to the issue of any proceedings.[9]
[7] Exhibit 1, pages 158 - 159.
[8] Exhibit 1, pages 1 - 5; Exhibit 1, pages 230 - 233; Exhibit 1, pages 158 - 159.
[9] Exhibit 1, pages 158 - 159.

The defendant was retained by the first plaintiff on the execution by the directors of the first plaintiff and return of a letter dated 26 August 2014 (the first retainer letter).[10] Legal work was to be undertaken by an appropriate solicitor nominated by the defendant and supervised by a director of the defendant, in this case CR to be supervised by Mr Mossenson.[11] Mr Wheatley, the third party, was not involved in work on the file at this stage.
[10] Exhibit 1, pages 48 - 59.
[11] Exhibit 1, pages 48 - 59 at [48] What I take to be the directors' names, together with Contact name, [50] cl 3. Personnel, [55] cl 13. Terms of Engagement at A. (2); Exhibit 4, page 3 File opening authority; Exhibit 4, pages 127 - 211.
The work the subject of the retainer is described as:[12]
To advise client, to consider Restraint of Debtors application, to prepare and lodge a caveat and statutory declaration in support thereof against Joanna's interest in the Bullbrook [sic] Property, to commence a District Court writ against Joanna and Maureen, if there is no appearance entered by Joanna and Maureen to obtain default judgement against Joanna and Maureen, attendances, correspondence and generally. If there is an appearance entered by Joanna and Maureen, further work will form the subject of a further Scope of Work
together with all work that the defendant thought reasonably incidental and ancillary to that scope of work.
[12] Under the heading cl 5, A Scope of Work.
Over the following period various instructions[13] were taken directly from Tony as to what had been discussed between him and Joanna and between him and Maureen with respect to the money advanced. One particular area on which further instructions were sought was as to whether there had been any agreement with Joanna for repayment by instalments or for the payment of interest. The instructions appear to be uncertain in some respects but confirmed that all of the funds were viewed by Tony to give rise to debt owed respectively by Joanna and Margaret repayable on the sale of the two properties, the Jess Road Bullsbrook property and the Hilbert property as referred to in the note of 21 August 2014. A proof of evidence was not taken from Tony at that stage.
[13] Exhibit 1, pages 62 - 63; Exhibit 1 page 67; Exhibit 1, pages 68 - 69; Exhibit 1, page 154; Exhibit 1, pages 158 ‑ 159.
Those instructions also confirmed that of the $160,000 sum for Joanna's benefit, $130,000 was paid by cheque to Midland Settlements who were acting for Joanna in the purchase of a strata titled unit at Great Northern Highway Bullsbrook (the GNH Bullsbrook property) and a retail business operating from it. A further $30,000 for Joanna's benefit was used to build a room onto the Jess Road Bullsbrook property owned by Maureen. Other funds were used to pay bills for Maureen. There had been discussion between Tony and Joanna about repayments by instalment by Joanna but Tony did not confirm any agreement for the acceleration of repayment of any part of the debt on default in instalments or for payment of interest.
On 22 September 2014 following consideration by the defendant, Caveat M774791 was lodged asserting a claim on the part of the first plaintiff as a beneficiary of a resulting or constructive trust over the interest of Joanna in the GNH Bullsbrook property.[14] The statutory declaration made by Tony in support of the caveat in particular at pars 4, 7, 14 and 15 expressly refers the $130,000 paid to the settlement agent for Joanna's benefit as a contribution but also as a loan. In the context of establishing a caveatable interest in property, a contribution to the purchase price is not the same as a loan.
[14] Exhibit 4, pages 82 - 84.
On 22 October 2014 the Registrar of Titles issued a notice with respect to Caveat M774791 pursuant to s 138B of the Transfer of Land Act 1893 (WA). The notice stated that unless an order extending the caveat was made by the Supreme Court and lodged with Landgate before 13 November 2014 Caveat M774791 would lapse.
A second letter of retainer dated 28 October 2014[15] was then entered into (the second retainer letter). It describes the further scope of work as, inter alia, being to advise client, the commencement of a Supreme Court application to maintain the caveat along with written submissions and appearances on that application and 'to file and serve' writs in the District Court against each of Joanna and Maureen. Further work would be the subject of a new retainer.
[15] Exhibit 1, pages 97 - 107.
On 4 November 2014 the defendant wrote to the first plaintiff and advised, correctly in my view, that there was no caveatable interest arising either by way of contribution (meaning resulting or constructive trust) or equitable mortgage.[16] No Supreme Court order was sought and Caveat M774791 lapsed.
[16] Exhibit 1, pages 112 - 114.
Thereafter, further details were supplied by both Tony and Lina as to company funds paid for the benefit of Joanna and Maureen directly and also in repayment of Tony's credit card.[17]^,[18] Tony confirmed that repayment of the loans was only to be made on the sale of the Jess Road Bullsbrook property and the Hilbert property both owned by Maureen, and not from the proceeds of sale of the GNH Bullsbrook property owned by Joanna.[19]
[17] Exhibit 1, page 140.
[18] Instructions relating to the use of Tony's credit card do not appear to have been raised at the first consultation with CR in August 2014.
[19] Exhibit 1, page 154.
As at 1 December 2014 neither the Jess Road Bullsbrook property or the Hilbert property had been sold. From the time of the first retainer letter and after the defendant was alive to the fact that it could be premature to commence proceedings against Joanna as the loans would not yet be due and payable in that circumstance.[20]^,[21] The same reasoning must apply to any loan to Maureen. Further, by 1 December 2014, the defendant advised that it may be 'difficult to enforce any agreement made between Joanna and [the first plaintiff] against monies owned by Maureen'.[22]
[20] Exhibit 1, pages 48 - 59 at page 49.
[21] Exhibit 1, pages 128 - 129 at page 129; Exhibit 1, page 154.
[22] Exhibit 1, pages 158 - 159.
On 1 December 2014 the defendant caused a writ with a general endorsement of claim to issue out of the District Court of Western Australia in which the first plaintiff claimed to recover $215,600.78 from Joanna pursuant to various loan agreements and $7,125.20 for goods supplied (the 3934 Action).[23]
[23] Exhibit 1, pages 167 - 170.
On the same day the defendant caused a writ with a general endorsement of claim to issue out of the District Court of Western Australia in which the first plaintiff claimed to recover $103,576 from Maureen pursuant to a loan agreement (the 3936 Action).[24]
[24] Exhibit 1, pages 163 - 166.
During this period consideration of and the preparation of documents to support application under the Restraint of Debtors Act 1984 (WA) (the Act) against Joanna were progressed.[25] That application (the Restraint of Debtors Application) would be made in the 3934 Action.
[25] Exhibit 1, pages 112 - 114.
By letter dated 19 September 2014, with respect to the proposed Restraint of Debtors Application, the defendant advised that if Joanna was only obliged to repay the loans or part of them after the sale of property then the loans were not yet due and payable.[26] The defendant advised that this might cause the court to decline to make an order restraining the sale of Joanna's GNH Bullsbrook property but that one option may be to simply omit 'these details' from the application. Another option would be to ask Joanna for an irrevocable authority that the proceeds of the sale of Joanna's GNH Bullsbrook property would be paid to the first plaintiff and use any refusal as further evidence in support of the application.
[26] Exhibit 1, pages 128 - 129.
The suggestion by a solicitor that important information be omitted from an affidavit to be filed in the court is startling. Thankfully that course of action does not appear to have been followed.[27] An irrevocable authority was sought but was not forthcoming. I will come back later to what happened in the Restraint of Debtors Application.
[27] Exhibit 4, pages 15 - 82.
The third party became involved with the file in January 2015. Until then, work was undertaken by CR and/or Mr Mossenson, a director of the defendant.[28] After he become involved the third party was involved in the drafting of some but not all of the statements of claim and amendments thereto filed in the 3934 Action and the 3936 Action. The third party had the primary conduct of the file but was not, however, the only fee earner on the file. I set out his involvement when considering the third party action.
[28] Some other fee earners also recorded some limited time to the file.

The Statement of Claim filed 20 January 2015 in the 3934 Action[29] pleaded against Joanna, relevantly, that:
1.During 2011, 2012 and 2013 the first plaintiff's money had been advanced to Joanna by 36 separate advances totalling $105,600.78 (loans) on the express basis that the loans would be repaid to the first plaintiff when the Hilbert property owned by Maureen and subsequently Maureen's property at Jess Road, Bullsbrook were sold. It was further pleaded that there was an implied term that those loans would be repaid within a reasonable time.[30] Some of the advances particularised were made by the use of Tony's credit card.
2.Further indebtedness by way of the trade debt which was agreed to be added to the various existing loans. It was further pleaded that there was an implied term that those loans would be repaid within a reasonable time.[31]
3.With respect to the sum of $130,000, that an agreement to lend money to Joanna to assist with the purchase of the Business and the GNH Bullsbrook property was made in May 2012, repayment was to be by way of instalments with the balance to be repaid from the sale of the Hilbert property. It was further pleaded that there was an implied term that loan would be repaid within a reasonable time.[32]
4.It was pleaded that in or about early 2013 Joanna advised Tony that Maureen intended to sell her Jess Road Bullsbrook property and the loans would be repaid from whichever of the Jess Road Bullsbrook property or the Hilbert property sold first.
5.The first plaintiff claimed by way of relief repayment of the various loans, interest, an equitable charge over the GNH Bullsbrook property and costs.
[29] Exhibit 1, pages 220 - 229.
[30] Paragraphs 4, 5 and 6. It is clear that some of the monies advanced was by way of use of a credit card that was later established to be in Tony's name.
[31] Paragraphs 9, 10 and 11.
[32] Paragraphs 14 - 17.
The Statement of Claim filed 20 January 2015 in the 3936 Action pleaded, relevantly, that in or about January and June 2011 the first plaintiff through Tony orally agreed with Joanna on behalf of Maureen to lend Maureen three separate amounts which would be repaid from the proceeds of sale of Hilbert property. It was further pleaded that there was an implied term that that those loans would be repaid within a reasonable time. Part of the relief sought was a declaration that the first plaintiff was entitled to an equitable charge over the Hilbert property and Jess Road Bullsbrook property.[33]
[33] Exhibit 1, pages 230 - 233.
On or about 20 January 2015 the defendant filed Caveat M889925 against the interest of Maureen in the Jess Road Bullsbrook property asserting an equitable charge on the basis set out in the Statement of Claim in the 3936 Action. I will come back to Caveat M889925 later.
The conduct of each of the 3934 Action and the 3936 Action did not go smoothly.
The Statement of Claim in the 3934 Action was initially filed on 20 January 2015[34] and was subsequently amended on 30 July 2015,[35] 9 November 2015[36] and 23 June 2016.[37]
[34] Exhibit 1, pages 220 - 229.
[35] Exhibit 1, pages 269 - 281.
[36] Exhibit 1, pages 298 - 315.
[37] Exhibit 1, pages 600 - 612.
The Statement of Claim in the 3936 Action was also filed on 20 January 2015[38] and amendments were made on 30 June 2015,[39] 22 July 2015[40] and 9 November 2015.[41]
[38] Exhibit 1, pages 230 - 233.
[39] Exhibit 1, pages 257 - 262.
[40] Exhibit 1, pages 263 - 268.
[41] Exhibit 1, pages 316 - 321.
Joanna and Maureen defended the proceeding, it would appear with some vigour. I infer from correspondence in evidence and a review of the pleadings' amendments that some of the amendments made were in response to matters raised by way of defence but there were various objections to the pleaded case raised by the defendants' solicitor and parts of the Statements of Claim were struck out.
At one stage applications were brought against Joanna and Maureen for specific discovery. Those applications were dismissed by Deputy Registrar Hewitt. An appeal was brought with respect to those applications and was heard by Herron DCJ on 2 June 2016. His Honour confirmed Deputy Registrar Hewitt's decision and dismissed the applications for specific discovery. Appeals from Herron DCJ's decisions numbered 53 of 2016 (relating to the 3934 Action) and 54 of 2016 (relating to the 3936 Action) to the Supreme Court were commenced.
At the same time pleadings by way of defence to the 3934 Action and the 3936 Action raised the issue of whether loans had been made by the first plaintiff to each of Joanna and Maureen. Each of Joanna and Maureen pleaded, inter alia, that all of their dealings had been with Tony, any funds provided to them had been provided by Tony, and further that most of those funds were gifts.
I will set out the facts referred to in this and the following paragraphs in more detail below, but it appears that in response to the plea in the defence that the dealings were all with Tony personally, on 9 November 2015 amendments were made to the Statement of Claim in the 3934 Action claiming that Tony had made loans in the alternative to the first plaintiff having made them. Tony was not a party to the 3934 Action. The first plaintiff then made application in December 2015 to join Tony as a second plaintiff in the 3934 Action. That application for joinder was dismissed in early 2016.
On 26 February 2016 the defendant then issued a further writ out of the District Court (the 698 Action) wherein Tony sued both Joanna and Maureen claiming either personally or in the alternative to the claims of the first plaintiff the majority of the funds already claimed in the 3934 Action and the 3936 Action by the first plaintiff.
By a letter dated 30 March 2016 from the defendant to the first plaintiff, a further retainer was entered into (the 698 retainer letter).[42] That retainer related to the 698 Action. The Scope of Work was to issue a District Court writ on behalf of Tony against Joanna and Maureen 'to recover the amounts claimed and proceed to the conclusion of this action', work incidental and ancillary to the scope of work and all work reasonably necessary to maintain [the client's] interests.
[42] Exhibit 1, pages 538 - 549.
Further applications were made by the defendant, at about the same time as the 698 Action was commenced, to amend the written endorsements of claim, to add new defendants, Maureen to the 3934 Action and Joanna to the 3936 Action, and to add new causes of action in the 3934 Action and the 3936 Action. On 9 June 2016 Deputy Registrar Hewitt refused those applications.
A few days later, on 14 June 2016 Registrar Kingsley made an order that the 698 Action be stayed on the basis that it was an abuse of process because of the significant overlap in seeking the recovery of substantially the same funds the subject of the 3934 Action and the 3936 Action, but on behalf of an alternative plaintiff, Tony.
The defendant on 20 June 2016 advised the first plaintiff to appeal from the 14 June 2016 decision of Registrar Kingsley and obtain an opinion from counsel. On 23 June 2016 a notice of appeal to a judge of this court from the decision of Registrar Kingsley was filed.
An opinion was duly sought from counsel, Dr MacMillan. On 26 July 2016, counsel advised that the 3934 Action and the 3936 Action were doomed to fail because they were issued prior to the sale of the Hilbert property. Dr MacMillan was firmly of the view that the then pleaded implied terms would not be successful to rectify that difficulty.[43] He suggested that the 3934 Action and the 3936 Action[44] be discontinued and the first plaintiff be joined to the 698 Action.[45]
[43] By amendments to the Statements of Claim in the 3934 Action and the 3936 Action additional implied terms had been pleaded clearly to avoid the fact that the proceedings had been commenced prior to the sale of the Hilbert property or the Jess Road Bullsbrook property.
[44] Including Appeals 53 and 54 of 2016.
[45] Exhibit 2, pages 21 - 25.
On 27 July 2016 the defendant advised the first plaintiff not to discontinue the 3934 Action or the 3936 Action but instead to allow the actions to become inactive and not to proceed with Appeals 53 and 54 of 2016.[46] On 12 August 2016 the defendant advised the first plaintiff that in the event of the discontinuance or dismissal of the 3934 Action and the 3936 Action that the first plaintiff would have to pay Joanna and Maureen's costs. It was suggested that the only way the first plaintiff 'could be compensated for its costs' was if Tony assigned the benefit of his claims to the first plaintiff. How that course of action might bring about 'compensation it's for costs' was not explained.
[46] For specific discovery.
In late September 2016 the first and second plaintiffs had lost faith in the defendant and instructed a new solicitor, Mr Robinson, who took over the litigation.[47] When Mr Robinson took over the litigation there were three District Court actions, the 3934 Action, the 3936 Action and the 698 Action, Appeals 53 and 54 of 2016 to the Supreme Court relating to specific discovery and the appeal to a judge of this court from the order of Registrar Kingsley staying the 698 Action. Costs of at least $18,739.67 had been ordered against the first plaintiff.
[47] Exhibit 1, pages 6 and 7.
On 17 October 2016, O'Neal DCJ was to hear the appeal from the decision of Registrar Kingsley to stay the 698 Action. Independent counsel, Mr Mendelow, appeared for Tony on instructions from Mr Robinson. The appeal was adjourned to 15 November 2016. Mr Mendelow again appeared and he had prepared a minute of proposed substituted Statement of Claim in the 698 Action and brought two applications dated 15 November 2016 seeking leave to discontinue the 3934 Action and the 3936 Action. Mr Mendelow sought and obtained a further adjournment of the appeal on the basis that the appeal should be considered only after the applications for leave to discontinue.
When the matter came back before O'Neal DCJ on 2 December 2016 the applications for leave to discontinue were pursued by counsel. They were not opposed but the questions of indemnity costs was argued. His Honour ordered the discontinuance of the 3934 Action and 3936 Action and required the first plaintiff to pay the costs of the defendants in those actions on an indemnity basis. His Honour was at pains to say that his decision to grant leave to discontinue was in accordance with the parties' wishes and did not involve any decision by him on the merits of any of the proceedings.
Further, the 698 Action was allowed to resume subject to an undertaking that Tony's solicitors hold $150,000 in their trust account to satisfy the costs orders, the Statement of Claim as it then stood was struck out, a minute of proposed substituted Statement of Claim drafted by counsel was ordered to stand as a Substituted Statement of Claim, and the first plaintiff was to pay the costs of the appeal on an indemnity basis.
The costs of Joanna and Maureen in the 3934 Action and the 3936 Action (including the costs in Appeals 53 and 54 of 2016) along with their costs before O'Neal DCJ on the appeal of the stay application in the 698 Action were later agreed to be $122,000.
It is not clear what happened with the 698 Action between 15 November 2016 and 13 September 2017 when a deed of settlement was entered into between the first and second plaintiffs and Joanna and Maureen by which Joanna and Maureen agreed to pay to the first and second plaintiffs the sum of $155,000 in full satisfaction of the claims against them. The deed of settlement further provided that the agreed indemnity costs of $122,000 would be offset against the settlement sum of $155,000 resulting in a net payment to the first and second plaintiffs of $33,000.
The first plaintiff and Tony commenced these proceedings in the District Court claiming, inter alia, recovery of the $122,000 required to be paid by them by way of indemnity costs to Joanna and Maureen, other out of pocket sums and the recovery of legal costs paid to the defendant.
On 22 June 2019 the defendant agreed, without admission of liability to pay $130,000, to the plaintiffs in payment of part of those claims. The first plaintiff and Tony retained the right to pursue recovery of all of the legal costs paid by each of them to the defendant associated with the 3934 Action, the 3936 Action and the 698 Action and other miscellaneous matters such as the caveats.
Turning now to the law.

The law with respect to the plaintiff's claim and advocate's immunity

It is accepted by the defendant that, pursuant to an implied term of its retainer agreements, it owed firstly to the first plaintiff and later to Tony a contractual obligation to exercise reasonable skill, care and diligence in the provision of its legal services. The defendant also accepted that it was retained by Tony with respect to the 698 Action pursuant to an implied retainer notwithstanding no written retainer agreement was entered into with Tony.
It is also accepted by the defendant that it owed, as a consequence of having been retained by the first plaintiff and later Tony, a common law duty to each of them to exercise reasonable skill, care and diligence. That is a proper, but shorthand, description of the duties owed by a solicitor to their client.
A solicitor's retainer may be in writing, oral or inferred from conduct: Blyth v Fladgate [1891] 1 Ch 337, 355; Pegrum v Fatharly (1996) 14 WAR 92; Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321 [77]. The precise incidents duties of a solicitor will depend on the extent of a solicitor's retainer: Nigam v Harm [No 2] [2011] WASCA 221 [82].
When undertaking the work the subject of a retainer, a solicitor is required to exercise the care and skill to be expected of a qualified and ordinary competent and careful solicitor in the exercise of his or her profession: Hawkins v Clayton (1988) 164 CLR 539, 580; Nigam v Harm [No 2] [85].
Clients vary in levels of sophistication. A solicitor should assist a client to make an informed choice. This requires that the respective advantages and risks involved in taking action should be explained and different courses of action explained in a way a client can understand so that the client can then make a properly considered choice: Studer v Boettcher [2000] NSWCA 263 [75]; Capebay Holdings Pty Ltd v Marks Healy Sands [2002] WASC 287 [94]; Artahs Pty Ltd v Gall Standfield & Smith (a firm) [2012] QCA 272 [64] - [68].
When retained to advise and undertake litigation, a solicitor is under a duty to make a proper investigation into the existence of a cause of action or defence so they can form an independent assessment as to whether a cause of action or defence exists. That obligation continues even where counsel is briefed and it is particularly so where the proceedings are instituted without either investigation of the circumstances or the delivery of a full brief to counsel containing adequate information and material: Nigam v Harm [No 2] [173]; Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773 [48].
It is incumbent on a solicitor to give proper attention to the facts or law in circumstances where, if such attention had been given, it would have been obvious there were no real prospects of success: Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [48]; Steindl Nominees Pty Ltd v Laghaifar [2003] QCA 157; [2003] 2 QdR 683 [22], [24] ‑ [27].
A solicitor must exercise care to identify major deficiencies or significant obstacles in a client's case: Weller v Phipps [2010] NSWCA 323 [74] - [80]. That duty continues through the various stages of the case. If a case assessment changes, advice must be offered.
Of course, clients are free to reject advice and insist on an arguable although weak case being litigated. The same cannot be said of an unarguable case: Steindl Nominees Pty Ltd v Laghaifar. The client's right to give the instructions and take the risk on a weak case, can only be after the risks have been properly identified and explained to them: Dyczynski v Gibson [2020] FCAFC 120 [218].
It should, of course, be kept in mind that the onus of proving professional negligence over and above errors of judgment is a substantial one: Rondel v Worsley [1969] 1 AC 191.
The defendant and, in turn, the third party rely on advocates immunity to argue that:
1.on the part of the defendant: it cannot be sued with respect to any work undertaken on pleadings and for that reason the plaintiffs cannot establish that they are entitled to recover the whole of the legal costs paid to the defendant. The plaintiffs accepted, at least as a general proposition, that it could not sue in negligence for work done on pleadings and hence formulated their case on the basis that the proceedings should not have been commenced at all. Such a claim would not, they say, attract advocates' immunity; and
2.on the part of the third party: the defendant could not maintain its third party claim that he was negligent in the preparation of the pleadings.
An advocate, including a solicitor, is generally immune from suit for work done in court or work done out of court which is intimately connected with a decision affecting the conduct of a case in court: Giannarelli v Wraith (1988) 165 CLR 543; D'Orta‑Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1. The extent of an advocate's immunity has been somewhat of a vexed area in recent years. Some jurisdictions have discarded the immunity either judicially or by legislation. The scope of the immunity in Australia remains somewhat uncertain.
The rationale for such an immunity is the danger to the public interest arising where there are satellite proceedings involving collateral attacks, and essentially re‑litigation, of issues already determined by the courts: D'Orta‑Ekenaike v Victoria Legal Aid.
That rationale does not exist where the conduct of the advocate does not move the case towards a judicial determination. As was said by Mason CJ in Giannarelliv Wraith the immunity extends to 'work done out of court which leads to a decision affecting the conduct of the case in court'. Central to whether the immunity applies must then be this question: will an examination of whether the actions of a legal advisor were negligent involve any re‑examination of a determination on the merits of a decision of the court after a substantive hearing.
In Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16; (2016) 259 CLR 1 [46] and again in Kendirjian v Lepore[2017] HCA 13; (2017) 259 CLR 275 [28] - [32] the High Court clarified that the public policy reason for protecting advocates from immunity is the protection of the finality and certainty of judicial determinations.
It is for that reason that the immunity does not extend to negligent advice to accept or reject a compromise even where the compromise is then embodied in orders of the court: Attwells v Jackson Lalic Lawyers Pty Ltd [51] - [53], [59].
The immunity does not extend to negligent advice to commence proceedings which are doomed to fail or to advice to continue litigation or to cease litigating: Attwells [50]; Kendirjian v Lapore [32]. In such a case the central question will be: was the advice reasonable in all the circumstances known to the advisor at the time it was given?
Advocates immunity has also been found to extend to inadequacies in trial preparation, the determination of witnesses to be called and what evidence should be adduced. In cases decided before Attwells and Kendirjian it has been found to extend to the drawing and amendment of pleadings in cases which proceeded to and were resolved at trial: Keefe v Marks (1989) 16 NSWLR 713, 718, 725, 729; Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348 [121].
However, even before the High Court's decision in Attwells, it was far from clear that advocate's immunity applied to the negligent preparation of pleadings where the matter in which the pleadings are prepared is not resolved by judicial determination: Alpine Holdings Pty Ltd v Feinauer [2008] WASCA 85 [86] - [87], [91] - [92]; Sims v Chong [2015] FCAFC 80; (2015) 321 ALR 509 [68] - [74].

I have not found any Australian authority, post Attwells, which considers whether advocates immunity extends to the preparation of pleadings in cases not resolved by a judicial determination and the principles outlined above suggest that it should not.
It appears to me that a general proposition of law (even if accepted by the plaintiffs) that a party could never sue in negligence with respect to the preparation of pleadings, is wrong. The authorities establish that where cases are resolved after trial the preparation of pleadings will be sufficiently intimately connected with the conduct of a case in court to warrant immunity, but that is not the case here. None of the 3934 Action, the 3936 Action or the 698 Action were resolved after trial or, indeed, after a substantial hearing on the merits.
Turning now to the law concerning recovery of fees. A solicitor is not entitled to fees where the work to which the fees relate are unnecessary for the purposes of the client, is useless or is done negligently or in ignorance of the law: Hill v Featherstonhaugh (1831) 7 Bing 569, 571 - 572, 573; 131 ER 220; Re Windeyer, Fawl & Co; Ex parte Foley (1930) 31 SR (NSW) 145, 149; Re Massey & Carey (1884) 26 ChD 459, 461 - 462 (Cotton J), 463 (Bowen LJ), 464 (Fry LJ).
Where a contract of retainer is an entire one, it will be a complete defence to an action by a solicitor to recover fees or a basis for the recovery of all of the fees already paid, if the client can establish a total lack of benefit arising from the solicitor's negligence: Cachia v Isaacs (1985) 3 NSWLR 366, 370F - 371E (Kirby P), 376D - 379A (Hope JA), 380D. In other words, a solicitor who is negligent and whose work gains no benefit for the client is not entitled to any part of their fees.
This does not mean that fees for that part of the work undertaken without negligence and for which the client has received a benefit has been obtained cannot be recovered, or if already received, retained by a solicitor. Costs which are severable, untainted by negligence and which relate to matters distinct from those for which the solicitor has been found to be negligent may be recovered or retained: Cachia v Isaacs (371D) (Kirby P), (380D) (Hope JA).
Where there is an entire retainer but some benefit has been obtained or where the retainer is divisible then payment should be made for the work done without negligence.
In Cachia v Isaacs (371D) (Kirby P) expressed the view that where a solicitor is found to be negligent in the conduct of an action, the onus is on the solicitor to establish that, despite that negligence, some real advantage has accrued to the client from the services and it would be unjust for the client to receive that advantage without making payment of an appropriate sum. This was said in the context of the solicitor suing for his fees.
Where, as here, the action is for the recovery of fees paid, the plaintiff bears the onus of proof on the action. Once a prima facie case is established, the authorities would suggest that the defendant bears an evidentiary onus to put forward evidence which might support a finding there has been a benefit to the plaintiff but, overall, the onus of proof in the action remains on the plaintiff: Purkess v Crittenden (1965) 114 CLR 164, 167 - 168; Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd [2018] NSWCA 213 [289] - [291].
It should also be noted that in Western Australia the idea that a solicitor's retainer to undertake common law litigation will ordinarily be an entire contract is rarely viable: Del Borrello v Friedman and Lurie (a firm) [67] - [68] (Kennedy J); Clairs Keeley (a firm) v Treacy [No 3] [2005] WASCA 86 [41]; Lewis Blyth and Hooper v Dennis [2007] WASC 177 [36] - [53] (Newnes J).

Determination

Each of the first and second plaintiffs retained the defendant to, inter alia, undertake legal work associated with the recovery of its funds which had been applied for the benefit of Joanna and Maureen.
The initial work for the first plaintiff was undertaken on the terms set out in the first retainer letter.[48] Subsequent work for the first plaintiff was undertaken on the terms set out in the second retainer letter.[49] The scope of works is described in each of those written retainers and is limited to that described with further work intended to be the subject of a new retainer agreement.
[48] Exhibit 1, pages 48 - 59.
[49] Exhibit 1, pages 97 - 107.
Work continued, well in excess of the scope of work described in either of the first or the second retainer letters. I infer from the first plaintiff's and the defendant's conduct that there was a continuing retainer after the scope of works in the second retainer letter was completed, the terms of which, but for the description of the scope of works, were otherwise in accordance with the first and second retainer letters.
The express terms of the retainer letters and the inferred terms of the continuing retainer entitled the defendant to charge for the work done on the following terms:
1.Clause 11E: invoices could be issued on a monthly basis, or upon completion of the matter.
2.Clause 5B: the basis of the calculation of fees is on a time billing basis at an hourly rate and in increments of six‑minute units.
3.Clause 8: monies could be requested on account and, if not forthcoming, the defendant might not carry on further work.
4.Clause 11F: interest is chargeable on unpaid accounts.
5.Clause 13B(2): payment of the invoices would be made even if the work was not complete.
6.Clause 13G(b): the retainer could be terminated, if it is not unethical to do so, if, inter alia, invoices have not been paid.
7.Clause 13K: the first plaintiff authorised the defendant to render interim invoices at the intervals outlined (monthly), each interim invoice is rendered as a final invoice.
Invoices were issued to the first plaintiff in accordance with those terms.[50] The defendant could terminate its retainer if the invoices were not paid. Accordingly, neither the written or the implied retainers by the first plaintiff of the defendant were entire contracts.
[50] Exhibit 4, pages 218 - 354.
With respect to the 698 Action, commenced in Tony's name, the defendant issued the 698 retainer letter which was addressed to the first plaintiff.[51] The defendant concedes it was impliedly retained by the second plaintiff but submits that the terms of the retainer are unclear. The 698 retainer letter, differently numbered, contains provisions to the same general effect as the first and second retainer letters including that invoices would be issued on a monthly basis and the defendant could terminate the retainer if the invoices remained unpaid. Work undertaken for Tony on the 698 Action was, I infer, on the same terms as those contained in the 698 retainer letter. That implied retainer was not an entire contract.
[51] Exhibit 1, pages 538 - 549.
Notwithstanding that the contracts of retainer were not entire contracts, the plaintiffs formulated their case on the basis that in order to recover the whole of the legal costs incurred, they would have to establish not only that the defendant was negligent in the commencement of the proceedings, but they obtained no real or substantial benefit from the legal services provided. Turning now to those issues.

Did the defendant breach the duty of care it owed to the plaintiffs in commencing the proceedings?

Was the 3934 Action against Joanna premature and unsustainable

All of the money sought to be recovered by the 3934 Action from Joanna was pleaded to have been agreed, expressly, to be repayable on the sale of the Hilbert Street property.[52] The Hilbert Street property was, as was known, owned by Maureen in her capacity as executor.[53] Where a contract provides by express terms for a time for repayment or a condition which will trigger an obligation to repay, then the cause of action accrues when the time period expires or the condition has occurred.[54] Prior to that date there may be a debt but not one which is due and owing. Prima facie, the proceedings were premature unless a basis for earlier repayment could be established. Proceedings started when no cause of action has accrued are doomed to fail.[55] This is sometimes referred to as Eshelby's principle.
[52] Initially on repayment of Hilbert Street but the statement of claim alleges that subsequently Joanna also offered to repay on the sale of the Jess Road Bullsbrook property.
[53] By 20 January 2015 at the latest Exhibit 1, pages 230 - 233.
[54] Ogilvie v Adams [1981] VR 1041, 1043 (Fullagar J); Netglory Pty Ltdv Caratti [2013] WASC 364 [285] (Edelman J); VL Finance Pty Ltd v Legudi [2003] VSC 57; 54 ATR 221 [39] - [47] (Nettle J).
[55] Eshelby v Federated European Bank Ltd [1932] 1 KB 423; Wigan v Edwards (1973) 1 ALR 497; (1973) 47 ALJR 586; Water Authority of Western Australia v AIL Holdings Pty Ltd(No 2)(1992) 10 WAR 233.
Even before the commencement of the 3934 Action, the defendant was alive to the fact that proceedings before the property sold would be premature, see [27] above.[56] I am fortified in this view by evidence that between 21 August 2014 and when the writs were issued in December 2014, CR and another earner, AJP, undertook research described as relating to 'accounting clauses and implied terms' and 'implied acceleration clause'.[57]^,[58] In the end, Tony's instructions on this point were that payment of instalments had been discussed with Joanna but no acceleration clause had been discussed or agreed.
[56] Exhibit 1, pages 128 - 129.
[57] Exhibit 4, pages 127 - 211, defendant's trust matter ledger report at pages 127, 128, 130; Exhibit 4, pages 218 ‑ 234, tax invoices.
[58] Tony's instructions were that no acceleration of any part of the debt was expressly agreed.
In the Statement of Claim in the 3934 Action the defendant pleaded that the funds advanced were repayable on the sale of the Hilbert Road and 'subsequently' on the sale of the Jess Road Bullsbrook property along with an implied term to the effect that the money would be repaid within a reasonable time. The Statement of Claim was later amended to plead that Joanna would do all things reasonably necessary to secure performance of the agreements.[59] Those implied term pleas are clearly intended to avoid the fact that the expressly agreed time for repayment had not arrived before the writ was issued.
[59] See par 17; Exhibit 1, pages 220 - 229.
The implied term pleas were misconceived. First, because a term that repayment will be made within a reasonable time would not be implied where it is contrary to an express term that repayment will be made on the happening of an event: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 347.
Second, because it is difficult to see how such a term Joanna would do all things reasonably necessary to ensure performance of the agreement could be implied where the triggering event for repayment is the sale of property owned by Maureen.[60] This is especially the case with the Hilbert property which was owned by Maureen in her capacity of executor because Maureen was subject to duties in the administration of the estate. Third, only terms capable of clear expression will be implied. Given the complexities arising out of Maureen's ownership of the Hilbert property, where she is subject to duties as executor, the pleaded term does not readily meet that criteria. Finally, there is only a bald assertion and no particulars pleaded to support any necessary plea that a reasonable time had passed or that something reasonably necessary to be done had not been done.
[60] Both the Hilbert property and the Jess Road Bullsbrook property being owned by Maureen but in different capacities.
This is not to say that, hypothetically, a court would not be prepared to imply terms providing for repayment of a loan where the event triggering repayment becomes impossible. This is because if moneys were advanced by way of loan, then the parties could not have intended the loan would never be repayable. By way of example, an implied term to the effect that if neither the Hilbert property or the Jess Road Bullsbrook property were able to be sold by Maureen, that Joanna's loans would become repayable after a further period of notice sufficient to enable Joanna to obtain alternative finance. That hypothetical path was not considered in this case and the evidence establishes that the Hilbert property sold in April 2015.
The defendant submitted that the point about the proceedings being premature was never taken by Joanna. The defendant says that the defendant was not negligent in commencing the 3934 Action by positing a counterfactual position.[61] The defendant says that even if the 3934 Action was commenced prematurely then at any time after the sale of the Hilbert property the pleadings could have been amended or the action discontinued and fresh proceedings commenced. The defendant submitted that a new action could have been commenced as late as during trial, that the trial judge would essentially make orders enabling the facilitation of the new action to trial without implications as to costs or the need to replead and take all the usual steps in the proceedings.
[61] The same point is taken with respect to the 3936 Action.
In my view, those submissions about the counterfactual position are wrong in this case because:
1.Joanna's solicitors were alive to the issue that the Hilbert property (and the Jess Road Bullsbrook property) had not been sold prior to the proceedings being commenced and that this meant there was no breach of the promise to repay. They wrote to the defendant taking that point as early as April 2015. The defence Joanna filed denied any entitlement to relief which, in my view, is sufficient to have allowed that point to be taken at trial. [62]
[62] Exhibit 1, pages 244 - 248; Defence dated 8 April 2015, par 3; Exhibit 1, pages 685 - 687.
2.The 3934 Action and the 3936 Action never came on for trial. It was decided to discontinue after the 698 Action was commenced and after Dr MacMillan's opinion was obtained.
3.The authorities make it clear that where proceedings are commenced before a cause of action accrues will not be able to be cured by amendment to the pleadings.[63]
[63] Eshelby v Federated European Bank Ltd [1932] 1 KB 254; Wigan v Edwards; Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2).
4.On 28 April 2015 a contract to sell the Hilbert property for the sale price of $2,700,000 was entered into by Maureen.[64] The point having been taken by Joanna's solicitor, no steps were taken on behalf of the first plaintiff at that time or after settlement of the sale to discontinue and commence fresh actions pleading that the alleged loans were (then) due and payable.
5.This is not a case like that before K Martin J in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340. There his Honour expressed the obiter view that a fresh writ could be issued for debts allegedly accruing after the issue of the initial writ and amalgamated with existing proceedings. In Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16]:
(a)The plaintiff had, prior to trial, issued fresh writs for the debts allegedly arising after the initial writ and those writs were stayed on the grounds of an abuse of process. The initial writ was properly commenced with respect to debts then alleged to be due and owing. That decision, to stay, was upheld on appeal. In its reasons for decision the Court of Appeal clearly referred to the Eshelby's principle as not having been relied by the defendant: Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76; (2017) 55 WAR 36 [26] and [73].
(b)K Martin J had, over the opposition of the defendant, then allowed the plaintiff to plead the after accruing claims. The opposition to that course was not based on Eshelby's principle.
(c)The parties prepared for trial on the basis of the pleadings including the after accruing claims.
(d)The defendant still did not take the point, it was raised by the trial judge at trial and disposed of on the basis that as the initial writ had been cross‑vested to Western Australia from New South Wales, the after accruing claims could be pursued on the basis of the procedural rules applying in New South Wales.
6.In these circumstances I cannot envisage a situation where a hypothetical trial judge would have allowed a discontinuance and recommencement of entirely fresh proceedings mid-trial without a substantial order as to costs of the discontinued actions. This is, in fact, equivalent to what occurred before O'Neal DCJ.
7.In any event, an assessment of whether the defendant was negligent in discharging its duties to the plaintiff with respect to the 3934 Action and whether the first plaintiff received any benefit from the 3934 Action should be undertaken by reference to what actually occurred and not by reference to a counterfactual.
[64] Exhibit 1, pages 504 - 530, Statement of Claim in the 698 Action dated 26 February 2016, par 54.
The plaintiffs also plead that the 3934 Action was unsustainable and deemed to fail because the case pleaded was to the effect that Joanna would repay the debts out of the proceeds of sale of the Hilbert property.[65]
[65] Amended statement of claim dated 3 September 2021, par 4.
The plaintiffs did not develop an argument at trial by reference to that part of their pleaded case[66] and it is not a natural reading of the various statements of claim in the 3934 Action but, I note, if the claims were to be read in that way, they would be unenforceable for two reasons. First, because Joanna did not own or appear to assert any rights in the Hilbert property and so could not have effectively promised to repay out of the proceeds of its sale, and second, any agreement to that effect was not in writing and would be unenforceable by reason of s 34 of the Property Law Act 1969 (WA).
[66] Plaintiffs' outline opening submissions dated 4 August 2021, par 30.
For those reasons the 3934 Action was premature and unsustainable.

Was the 3936 Action against Maureen premature and unsustainable?

The commencement of the proceedings in the 3936 Action[67] against Maureen was similarly flawed. The first Statement of Claim pleaded that loans made to Maureen were repayable from the proceeds of sale of the Hilbert property and that there was an implied term that each loan would be repaid with a reasonable time. The plea that repayment would be 'from' the proceeds seems to me to be contrary to Tony's written note of instructions in August 2014 that the repayment would be 'on the sale' of those properties.[68] In any event, exactly like the situation with the 3934 Action, the expressly agreed time for repayment had not arrived when the proceedings were commenced, no cause of action had accrued and the proceedings were premature.
[67] Exhibit 1, pages 230 - 233.
[68] See par 17 above and exhibit 4, pages 1 - 2.
Further, there is nothing in writing under Maureen's hand making enforceable any entitlement to repayment from the proceeds of sale of that property. The plea offends against s 34 of the Property Law Act.
The implied terms are unarguable because:
1.Repayment in a reasonable time is contrary to the express term that repayment would be either on or from the sale.
2.Maureen was not the owner of the Hilbert property in her own right. She was obliged to carry out obligations in the administration of the estate in preference to any personal obligations she may have. The very general way in which the implied term is pleaded does not take into account those competing obligations. Only a term capable of clear expression could be implied.
3.Finally, there is only a bald assertion and no particulars pleaded to support the plea that a reasonable time had passed.

Given my findings as to Mr Mossenson's continued involvement in the actions demonstrated on the face of the pleadings and the correspondence the defendant:
1.Has failed to prove the substantial underlying basis of its case against the third party, that the third party was acting with minimal supervision in his part of the conduct of the proceedings from 18 December 2014.
2.Cannot establish the specific breaches summarised above, that it was the defendant who took the actions complained of including the preparation of the allegedly prepared pleadings.
A further difficulty in the defendant's case against the third party with respect to the 3934 Action, the 3936 Action and Appeals 53 and 54 of 2016 is that it was the defendant, through CR and Mr Mossenson, who had prepared and issued the writs in the 3934 Action and the 3936 Action knowing that those proceedings were likely commenced before a cause of action had accrued. Correspondence to the first plaintiff variously dated 5 September 2014,[148] 9 September 2014[149] and 19 November 2014 where the defendant through CR and Mr Mossenson expressed the view that 'If the fact that Joanna was to repay the loans after the sale of the properties was a term of the agreement, the loans are not yet due and payable.'[150]
[148] Exhibit 1, page 65 - 66.
[149] Exhibit 1, pages 68 - 69.
[150] Exhibit 1, pages 128 - 129.
Accepting that the third party was involved in the commencement of and pleading in the 698 Action, it still holds true that his work on the file was obliged to be and, I infer, supervised by Mr Mossenson on behalf of the defendant.
Here the defendant through Mr Mossenson:
(a)knew about the defect in the 3934 Action and the 3936 Action and so knew or ought to have known about the defect in the appeals;
(b)had it in its power to prevent those actions from being commenced before the third party became involved in the case;
(c)knew or ought to have known before the 698 Action was commenced that the Statement of Claim in claimed amounts already claimed in the 3934 Action and the 3936 Action for a different plaintiff; and
(d)thereafter was obliged to and, I have inferred, supervised the work that was undertaken by the third party and its other employees who undertook work with respect to the matter,
hence, the defendant was not simply liable to the plaintiffs by reason of vicariously liability for the actions of the third party.
I accept the third party's pleaded defence: that in circumstances where the defendant is not liable to the plaintiff simply by reason of vicarious liability but also bears personal responsibility in negligence, the defendant cannot claim a right to a complete indemnity out of the breach of the term implied into the contract of employment and resolution of responsibility between employer and employee becomes a matter for apportionment, if the terms of the Contribution Act can be found to apply: Fleming's The Law of Torts (10^th ed), Lawbook Company at [11.90] note 106; Voli v Inglewood Shire Council (1963) 110 CLR 74, 100 (Windeyer J); Canberra Formwork Pty Ltd v Civil & Civic Ltd (1982) 41 ACTR 1, 25 - 26 (Blackburn CJ).
I pause here to note that had I been persuaded that the time recorded in the Matter Transaction Report constituted a full record of the time spent on the file, then, no time in supervision of the file by a director of the defendant is recorded. In that case the irresistible finding would be that the third party had been working with no supervision and the outcome would not have been any different.
It could hardly be said that the defendant was only liable on the basis of vicarious liability when:
(a)any entitlement in the defendant to charge the plaintiffs fees was expressly on the basis set out in the first retainer letter, the second retainer letter, the continuation of each of those retainers and the 698 retainer on which I infer the retainer by the second defendant was entered into. In each case the defendant promised both that it would nominate the appropriate solicitor to undertake the work on the file and the work would be supervised;
(b)the 3934 Action and the 3936 Action were not commenced by the third party;
(c)the transfer in the conduct of those actions to the third party was, I infer, at the direction of the defendant - it nominated the appropriate solicitor to undertake the work; but
(d)it elected not to supervise the work.
It is useful to set out here s 7 of the Contribution Act:[151]
[151] It should be kept in mind when reading that provision that s 7 was enacted to effect, inter alia, an alteration to the common law position that once there had been recovery by an injured person against one tortfeasor that tortfeasor bore the whole of the responsibility for the loss suffered and neither the injured person or the tortfeasor could seek to otherwise recover against other tortfeasors.
7.Rules applicable if there are 2 or more tortfeasors
(1)Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort -
(a)judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage;
(b)if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, parent or child of that person, against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given: and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action;
(c)any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought.
(1A)A person shall be entitled to be indemnified within the meaning of subsection (1)(c) -
(a)if his complicity in the tort arose from fraud or misrepresentation practised on him by the person from whom the indemnity is sought so that he honestly believed and had no reasonable cause to suspect the truth of the matters represented to him and would not have been liable in tort if such matters had been true;
(b)where the act was not clearly illegal or tortious in itself and the person seeking indemnity had no knowledge when the tort was committed of the true legal character of the act;
(c)where he is responsible on grounds of vicarious liability as for example in the case of master and servant or as a member of a partnership where the act was done without his connivance, knowledge or express authority.
(1B)Except in the case of an indictable offence arising out of some negligent act or omission, no contribution may be claimed by a person who is responsible for damages in tort if in the circumstances of the case he is or might be found guilty of any indictable offence (including an indictable offence punishable on summary conviction).
(2)In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.
(3)For the purposes of this section -
(a)the expressions parent and child have the same meanings respectively as they have for the purposes of the Fatal Accidents Act;
(b)the reference in this section to the judgment first given shall, in a case where that judgment is reversed on appeal, be construed as a reference to the judgment first given which is not so reversed and, in a case where a judgment is varied on appeal, be construed as a reference to that judgment as so varied.
Turning to second basis for the defendant's claim, for an indemnity or a contribution pursuant to s 7(1)(c) of the Contribution Act. For reasons which will become clear, it is necessary for me to consider the claim to an indemnity or contribution with respect to the 3934 Action, the 3936 Action and Appeals No 53 and 54 of 2016 grouped together separately to the claim for an indemnity or contribution with respect to the 698 Action.
For s 7(1)(c) of the Contribution Act to apply, the necessary conditions are that there is:
(a)a tortfeasor (the first tortfeasor) who has been found to be liable to a person who has suffered damage; and
(b)a second tortfeasor who would, if sued, be liable in respect to the same damage (whether as joint tortfeasor or otherwise).
It is only if those conditions are met, then the first tortfeasor can seek a contribution from the second tortfeasor, however, any entitlement to contribution is (quite properly) subject to a limitation. If the second tortfeasor is entitled to be indemnified by the first tortfeasor, then the first tortfeasor cannot recover a contribution from him. The statutory policy being that an already liable tortfeasor who is obliged to indemnify a second tortfeasor, either by contract where he has assumed the risk of damage between himself and the second tortfeasor, or by the quality of his negligent actions, whereby the operation of the law he becomes (at least between himself and the second tortfeasor) the person responsible for the damage, should be entitled to a contribution for the damage.
In respect to the 3934 Action, the 3936 Action and Appeals 53 of 2016 and 54 of 2016, the first of the necessary conditions is met on the determination that the defendant was negligent in respect to the commencement of each of those actions, was negligent in the commencements of the appeal because the underlying actions were unsustainable and, as a consequence, the plaintiff suffered damage.
There are three main ways in which an injured party may suffer damage as a result of the wrongdoings of multiple tortfeasors: if the tortfeasors are joint tortfeasors, if the tortfeasors are concurrent tortfeasors and where there are several tortfeasors causing different damage. The Contribution Act allows contribution between the first two categories but not the last, because, in the last category the tortfeasors are not responsible for the same damage: Dillingham Constructions Pty Ltd v Steel Mains Pty Ltd [1975] HCA 23; (1975) 132 CLR 323; (1975) 6 ALR 171, 175 (Barwick CJ) and 176 - 177 (Gibbs J).
It must be kept in mind that when considering the category into which a case might fall that 'damage' in s 7 is not the same as the damages which might flow from that damage and other damage which contributes to those damages: Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522; (1985) 59 ALR 722.
For reasons I have already outlined, it is not the first plaintiff's case and nor have I found, that the plaintiff's loss was a consequence of the defendant being negligent in the drafting of the pleadings in the 3934 Action or the 3936 Action subsequent to commencement of those actions and any negligence in the commencement of Appeal 53 of 2016 and Appeal 54 of 2016 does not lie in respect to the drafting of the appeal notices but in commencing the appeals when the underlying proceedings were doomed to failure.
In my view, even if the third party was negligent in the drafting of all or some of the pleadings in the 3934 Action and the 3936 Action, the damage suffered by the plaintiff as a consequence of that negligence is limited to the consequences of a poorly drafted pleading, perhaps a strike out application together with the associated costs, and that is not the same as the damage for commencing proceedings doomed to fail even though the amount of damages may overlap. To use the words of Barwick CJ in Dillingham Constructions v Steel Mains Pty Ltd at (175):
By no stretch of language can the earlier injury be said to be the same injury as the later injury. There are two injuries, two unrelated acts of negligence, two separate and distinct torts, though occurring to the same man at different times.
If I am wrong about that and had the third party been negligent in the production of the pleadings so as to be able to say that they are concurrent tortfeasors then I would not have required the third party to contribute to the repayment of legal costs for the following reasons.
First, the third party did not commence the 3934 Action or the 3936 Action. Those actions were commenced by CR and Mr Mossenson. Other people in the firm worked on the file.[152] People other than the third party were responsible for some of the pleadings. If I am wrong about the third party not being a concurrent tortfeasor the best that could be said is that the third party was a partial concurrent tortfeasor.
[152] The third party submits to the tune of about $65,000. I have assumed that figure to be correct.
Second, the defendant knew that those proceedings were commenced before the cause of action had accrued and must be presumed to have told the third party that was the case when it directed that the third party take over the conduct of the proceedings. In such a case it accepted the third party's work notwithstanding the defect in the claims.
Not surprisingly, it is no part of the defendant's pleaded case against the third party that he breached his duty to the plaintiff by failing to advise the plaintiff that the proceedings were doomed to fail. The defendant was obliged to do that and had not done so.
Third, this is a case where the defendant has promised to supervise the work of its employees. I have inferred that it did. That supervision could and should have recognised any failure on the part of an employee in the drafting of the pleadings.
Further, the defendant had promised its client that the appropriate employee for the job would be given the work and one of its directors would supervise that work. In the alternative situation, that no supervision had been undertaken, it is difficult to see how the defendant could assert any entitlement to charge for its fees in light of a breach of such an important contractual term.
In any case the law, as outlined above, is that a solicitor is not entitled to charge for its fees if it is negligent and the work negligently done does not give rise to a benefit to the client. If a defendant who is not entitled to its fees (for whatever reason) were to obtain a contribution from the third party, then the defendant will have received more than it was ever entitled to. The defendant would be unjustly enriched: Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 [22] and [67].
This is particularly where, as here, there is no evidence that the third party received any of the fees. On the contrary, the defendant received all of the fees. The third party has no obligation to repay.
Turning now to the third basis for the defendant's claim against the third party. This can be disposed of quickly. The claim is predicated on s 7(1A)(c) of the Contribution Act giving rise to a right to indemnity because the defendant is liable by reason of vicarious liability. In my view that is not correct because:
1.The relevant words of the chapeau of s 7(1) and s 7(1)(c) of the Contribution Act, 'where damage is suffered by any person as the result of a tort … any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect to the same damage whether as a joint tortfeasor or otherwise', enact a statutory basis for a contribution claim by a tortfeasor who has been found liable in damages in tort for another's loss.
2.The additional words of s 7(1)(c) 'but so that no person shall be entitled to recover contribution … from any person entitled to be indemnified by him in respect of the liability for which contribution is sought', go on to exclude a claim for contribution against a person who is entitled to be indemnified by tortfeasor claiming contribution.
3.The purpose of s 7(1A) is then to clarify and limit the extent of the exclusion from contribution by a person against whom a contribution is sought and who claims to be entitled to be indemnified (the indemnified party). The effect of s 7(1A)(c) when read with s 7(1)(c) is that in order to rely on the exclusion from contribution the indemnified party must be responsible for any wrongful act by reason of vicarious liability and the wrongful act must have been done without his connivance, knowledge or express authority.
4.There is nothing in my reading of s 7(1A)(c) of the Contribution Act nor in any authority to which I have been referred by the parties which would suggest that that subsection gives rise to right of contribution because a tortfeasor are liable to an injured party by reason of vicarious liability or that the subsection is concerned with the basis on which contribution is sought. Section 7(1A)(c) is concerned with how a basis for contribution might be excluded.
In my view, the defendant has failed to make out its case against the third party. I dismiss the third party claim.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
MB
Court Officer
29 MARCH 2022