Boland v Yates Property Corp- Webster v Yates

[1999] HCATrans 11

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S122 of 1998

B e t w e e n -

JOHN BOLAND (as representative partner of Abbott Tout Russell Kennedy, solicitors)

Applicant

and

YATES PROPERTY CORPORATION PTY LIMITED and IAN FRANCIS YATES

Respondents

Office of the Registry
  Sydney  No S123 of 1998

B e t w e e n -

JOHN WEBSTER

Applicant

and

YATES PROPERTY CORPORATION PTY LIMITED and IAN FRANCIS YATES

Respondents

Applications for special leave to appeal

KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 FEBRUARY 1999, AT 3.20 PM

Copyright in the High Court of Australia

_______________________

MR R.B.S. MACFARLAN, QC:   If the Court pleases, I appear with my learned friend, MR A.G. BELL, for the applicant, Boland.  (instructed by Minter Ellison)

MR D.M. QUICK, QC:   May it please the Court, I appear with my learned friends, MR C.D. CURTIS and MR D.K.L. RAPHAEL for the respondents in both matters.  (instructed by Bruce & Stewart)

KIRBY J:   I think it has been disclosed by the Registrar that years ago I knew Mr Boland at the Law School.  I have not had really any association with him since then.  Also, I should perhaps have disclosed that years ago I made an application to Abbott Tout Creer & Wilkinson, as it then was, to be an articled clerk.  I was rejected.  But I have no feelings about that, one way or the other, so many years on.  I, of course, sat in the Court of Appeal in the Yates Case between the parties, but I do not think any party raises any objection.

MR MACFARLAN:   No, your Honour.

MR QUICK:   No, your Honour.

CALLINAN J:   I think Abbott Tout may have been town agents in Sydney in a matter in which I had an interest in some proceedings in which my principal solicitors were Brisbane solicitors, but so far as I am aware, I have never met any partner of Abbott Tout.

MR WALKER:   Your Honours, I am not sure what course you wish to take in relation to Mr Webster’s application.

KIRBY J:   You can announce your appearance too, I think.

MR B.W. WALKER, SC:   I appear with    MR S.T. WHITE for Mr Webster as applicant.  (instructed by Moray & Agnew)  I assume there is some way in which the applications will be combined.

KIRBY J:   Yes, thank you.  We think we would be helped by hearing from you first, Mr Quick.

MR QUICK:   May it please the Court, does the Court propose to deal with both applications in the sense of hearing me on both matters or shall I deal first with the Abbott Tout matter.  Then you would hear my learned friend, Mr Macfarlan.

KIRBY J:   Yes, that might be the sensible course.

MR QUICK:   If the Court pleases.  There are a number of grounds of application for special leave, the first of which is that the solicitors in this particular case were relieved of the obligation to provide legal advice with respect to the type of evidence which should be sought, considered, and ultimately adduced in court, but they were relieved of that duty because of the fact that counsel had been engaged in the matter and that they relied upon counsel’s advice and, therefore, there could be no breach of duty.

The submission in response to that is twofold.  First, this is not a matter which should attract special leave because of the very unusual factual situation which occurred here.  It is described very briefly at page 168 in the judgment of the reasons for judgment of the Full Court.  In the middle of page 168 at line 7 the Court says this:

In this case the defence of reliance on counsel is a curious one.  It seems to be based on the evidence given by Mr Schwaiger.  He was asked whether he considered that there might be an advantage to Yates in the development it planned by comparison with any other developer who wished to undertake a similar development on the land.  His answer was, “I gave no independent consideration to that.  I was guided by and obtained and followed the advice of counsel.”  It might be thought from this answer that Abbott Tout had requested either Mr Simos or Mr Webster to advise on the issue and, having received that advice, rejected the possibility of a claim along the lines suggested.  But that was not the case.  Neither Mr Simos nor Mr Webster was asked to give any advice on what were the possible heads of compensation.  Indeed Mr Webster made it perfectly clear in his evidence that he regarded himself as not having been briefed to give any advice at all and Mr Simos was not asked to give any advice on the substantive aspects of the claim and only saw the valuers’ reports when they were in final form.

The picture that emerges from the evidence is that it was the valuers and not the lawyers who decided what was to be the proper formulation of the claim for compensation;…..The only advice that Mr Webster or Mr Simos provided to Abbott Tout with regard to the appropriateness of the approach taken by the valuers was their lack of critical comment on the valuations that had been prepared. 

What emerges from that is this is an unusual situation.  It is not a situation where solicitors have requested advice, have received advice, have considered the advice, have relied upon the advice.  Quite the contrary.  They sought no advice, they received no advice, they could therefore not have considered it or relied upon it and did not do so.  It becomes a very bad case in which to consider any general proposition that solicitors ought to be absolved of duty of care where counsel is retained.

There is a second reason why special leave should not be granted in this case.  That is because despite the wide range of cases to which this might apply if there is some new principle which emerges, the proposition that was put to the court that, in these circumstances, the solicitors were absolved of the obligation to consider the matter and to provide advice, not one case has been cited as authority that in these circumstances there can be any absolving of the duty of care.  That is a second ground why the first of the grounds for special leave, that is solicitors’ duty of care, ought not to be the subject of an application for special leave.

KIRBY J:   You may have a point on the question of the facts, but there can be little doubt that, as a matter of practicality, the relationship between the solicitors’ duty of care and the reliance upon counsel, if that there be, is a very important question because solicitors throughout this country are relying every day upon counsel and it may be that the issue is not thrown up by this case – we may have to hear what Mr Macfarlan has to say about that point – but the issue, and the way in which it is stated in the Full Court, is an extremely important one.  I mean, I am not saying it is a wrong principle.  It must be the case, or at least it is strongly arguable, that a solicitor cannot blindly follow the advice of counsel and have their own responsibilities for which they charge fees.  But the question of how one relates the one to the other is really quite an important question.

MR QUICK:   Your Honour, I must not have explained myself very well.  I was not advancing the proposition that this is not an important point.  What I was advancing is that nothing emerges from the cases to show that there is any question as to what are the circumstances in which a solicitor may rely upon counsel.  The propositions seem to be reasonably clear.  There is no real point of law in debate.  In fact, the Full Court described this as being simply an extraordinary proposition that, in the circumstances of this case, there could be a reliance upon counsel which, in law, absolved the solicitors from any question of breach of duty.

CALLINAN J:   I wondered about that, because this is not an ordinary case.  In a compensation case, or a case that involves a consideration of compensation, the role of the expert, the valuer, may very well put a somewhat different complexion upon the relationship even of a barrister and solicitor.  I am not saying it does, but it may arguably do so.  For my own part, with all due respect, the reasons for judgment of the Full Federal Court do not disclose to me that that special circumstance has perhaps been given the consideration that it should have.

MR QUICK:   Your Honour, the situation was unusual in this additional respect.  No one from Abbott Tout actually asked counsel, “Is what the valuers have done here consistent with authority?  Is it allowed under the principles of valuation?”  Counsel did not say to the solicitors, “We have checked and we find that what is done here is consistent with authority.”  There was a silence and no one ever turned their mind to the relevant question.  It is what makes the case so unusual.

CALLINAN J:   The presiding Judge here today has made some strong observations about difficulties associated with valuation questions and I just said something about it in a case that was – the decision was handed down yesterday, the different characterisation sometimes of matters as valuation points and others as legal points or legal matters.  The cases do not really show that there is any clear demarcation between them.  So that it is a complication, I think, that there is a valuer who is also, no doubt, giving independent advice to the solicitor on a matter peculiarly within his expertise.

MR QUICK:   Your Honour, it is not that sort of case.  What happened here was that there was a time related advantage that would have been obvious to a layman.

CALLINAN J:   I am not even satisfied about that.  Why is that not taken up in the hypothetical exercise that leads to the valuation of the property as if it had been developed?  Was that not the basis upon which all the valuers treated the matter initially?

MR QUICK:   No.  As I understood it, the time related advantage was never taken up because counsel thought that it just simply was not available on the interpretation which they made of Spencer’s Case.  They never looked at it.  They never considered it.  They never sought the evidence, they never presented the evidence.  But one thing they did not do was advise Abbott Tout as to whether it could or could not be done.  I do not think I can say anything more about the solicitors’ duty.

May I turn to the next point.  That is the suggestion that the case throws up an important point of valuation principle.  The issue of special value – or the question of special value that arose in this case arose in connection with a statute that has now been repealed.  All States except Queensland and all Territories have now codified the basis upon which valuation of compulsorily acquired land now takes place.  In New South Wales in particular, and we are dealing with a New South Wales statute, the term “special value” is used in the legislation as it is in the Victorian situation.  But in both of those cases the term is defined, leaving no scope for any important application of principles of valuation arising out of the pre-existing common law.  So that is ‑ ‑ ‑

KIRBY J:   Just as a matter of interest, do any of them refer to the so-called “head start” principle, which I do not think was used before Justice Handley‑ ‑ ‑

MR QUICK:   No, the word head start certainly does not appear.  We would submit that ‑ ‑ ‑

CALLINAN J:   Has it ever been used in any cases, head start?

KIRBY J:   Except for this case.

MR QUICK:   The Court of Appeal of New South Wales used it for the first time in the Yates Case in the appeal in this case.

KIRBY J:   That is the point that the solicitors are supposed to have known about.

MR QUICK:   We would submit not.  All that was done there was to put a name on something that is a matter of fact, and that is whether or not a developer, a long way advanced in a development, having spent a lot of money, time and effort, acquiring a lot of knowledge, is in a position more quickly to bring an income stream on by reason of that knowledge than another developer who has to do the same thing.  That happens to have been, in the Yates Case in the Court of Appeal, called a head start.  But it had previously been acknowledged in two cases in the Land and Environment Court, in Baringa Enterprises and in Kennedy Street.  In both of those cases the same judge, Justice Handley, said that there was, by reason of the time and effort and work and expense incurred an advantage.  He did not call it a head start, but the advantage was clearly recognised.  In our submission, there is no valuation principle that needs to be enunciated, needs to be clarified, it is simply a matter that will not arise again.

The third of the grounds of application for special leave in this case by the solicitors concerns advocate’s immunity.  The Full Court rejected immunity for two reasons.  First of all it said, on the facts, applying Giannarelli v Wraith, Saif Ali’s Case and Rees v Sinclair, there could be no immunity here because what was done was not so inextricably interwoven with what would take place in court for it to attract the immunity which applies to a barrister or to an advocate in relation to out of court work that is so inextricably interwoven. 

But there was an alternative ground, and that was – and in our submission it is clearly correct on the authorities – and that was that the immunity which exists in the public interest is an immunity peculiar to advocates acting as advocates and the solicitors here were never acting as advocates.  There were advocates other than the solicitors who acted as advocates throughout.

KIRBY J:   Is there not a bit of an inconsistency between the stance in relation to the solicitors and your stance in relation to Mr Webster.  Do both of them fall through the principle in the sense that if the so-called head start principle is not really a principle but a matter of calling evidence special value, then really the calling of the evidence is a matter, at least arguably, that is within the advocate’s obligations on his feet.

MR QUICK:   The calling of the evidence is, your Honour, but the gravamen of the claim in this case was the failure to consider whether or not evidence should be obtained and whether or not evidence – and to submit that evidence to counsel in order for counsel to say, or themselves to say, this is something that we must attend in court.  It is all so preliminary and none of it is the work of an advocate.  The policy considerations, in our submission, cannot apply.

KIRBY J:   The way the Full Court expressed it was that evidence would have been led along the lines sought to be adduced at the second hearing before Justice Cripps.  The respondent’s – this is Mr Webster’s failure was to lead evidence and conduct the case in a way that would see that your client recovered damages.  So that the proposition that the Full Court seemed to be resting on was the proposition of a failure to call and lead evidence.

MR QUICK:   That was the failure that ultimately led to the loss, but the claim against the solicitors was that they failed to turn their minds to what evidence ought to be obtained and considered, either by them or by counsel.  Now, if they never got the evidence, it could never be said – if they never turned their mind to the obtaining of the evidence, it could never be said that they did something which was inextricably interwoven with what happened in court.

But furthermore, the policy considerations which underlie the immunity cannot have any application to a non-advocate not performing advocate’s work.  They only apply in relation to what is so inextricably interwoven.  It comes back to that.  It cannot apply – the policy considerations simply cannot apply to work which takes place prior to the consideration of what happens or what should happen in court.  It ceases to be inextricably interwoven and therefore the policy considerations therefore do not continue to apply.

The next aspect of the advocate’s immunity case is that the applicants do not seek to challenge existing authority in any way.  They do not challenge Giannarelli or Saif Ali or Rees v Sinclair.  They accept those.  And what the case really is is an application of existing principle to an unusual set of facts.  So that we would submit that on that basis it is not a proper case for special leave to be granted on the immunity point.

The final aspect of the immunity point is that it is suggested that there is a conflict between the decision – the reasons of the Full Court here and the reasons of the Court of Appeal in New South Wales in Keefe v Marks.  Our submission is that there is no conflict.  Keefe v Marks starts with the proposition that the solicitor is liable.  Keefe v Marks was a claim for contribution by a solicitor, having accepted a liability and claiming contribution from the barrister.  So that Keefe v Marks is limited to its own facts, it accepts the proposition that the solicitor is liable and it is therefore clearly distinguishable on that ground.

The final of the grounds submitted by the applicant for special leave is that this case somehow or other involves the role of a Court of Appeal in considering an appeal on issues such as this.  Two things need to be said about that.  The first is that the Court was mindful of its role as a Court of Appeal and the limits to which it could go.  It cited Devries Case at page 170 in respect of one particular matter but it shows that the court was mindful of its obligation.  That is the first thing. 

The second thing is that the only finding of credibility made in this case – it is a finding which appears early on in the judgment at first instance – is a finding which is not based upon the observation of a witness in the witness box.  It was a finding relating to events which occurred some 12 years before.  What the learned trial judge did is she said:  “I do not accept the evidence of this witness, not because of what happens here before me but because the evidence conflicts with contemporary documents and I prefer to rely on the contemporary documents rather than his evidence.”  It was not a case of the Court of Appeal rejecting findings of

fact upon which the trial judge had an obvious advantage.  The Court of Appeal was in just the same position.

The next aspect of this particular matter, that is the appellate court’s finding, is that it is said that somehow or other there was the use of hindsight employed.  Our submission to that is that there was no hindsight and that the reasons which were given involve looking at the law as it was at the time, Baringa Enterprises and also Kennedy Street, looking at the facts, that is the obvious fact that here was someone who would have an advantage over another developer, questioning whether or not that would give rise to – if it had value, whether or not that could give rise to a claim, and the court went through that process just as easily as could the learned trial judge.  There is nothing special about the appellate court’s findings of fact in this case.

Those are the submissions for the respondent, if the Court pleases.

KIRBY J:   Yes, Mr Macfarlan.

MR MACFARLAN:   Your Honours, in relation to the first point as to solicitors’ duties, it needs to be appreciated, we submit, that the case commenced in 1986 and was prepared over a four year period.  During that time there was a sensible division of functions between counsel and solicitors whereby the solicitors attended to matters such as discovery and to evidentiary matters that were suggested and requested by counsel ‑ ‑ ‑

KIRBY J:   Do you say it was part of the contract of retainer that the solicitor would not give advice?

MR MACFARLAN:   That is the effect of it, your Honour, yes, that her Honour made a finding at first instance that was not referred to by the Full Court at all which clearly bore on the question of retainer and, in fact, indicated what the retainer was during that period.

KIRBY J:   So the solicitor is just a photocopier, basically?

MR MACFARLAN:   No, your Honour.  The solicitors had an important role here of doing the discovery, and they did that in an extensive way.  They attended conferences with counsel ‑ ‑ ‑

KIRBY J:   It is not a very good principle, though, is it, assuming it was ultimately endorsed, that a solicitor can just, as it were, suspend all his or her training and simply become really just a clerk, a ‑ ‑ ‑

MR MACFARLAN:   Your Honour, it depends on the contract of retainer. With the concurrence of the client, a very junior solicitor was put on the job here and that junior solicitor worked with the client’s representative and counsel to achieve the end in mind.  There were three very experienced valuers and two extremely experienced counsel, all of whom were applying their minds to the question of what valuation evidence should be led and in what way the valuation case should be formulated.  It would have been a waste of money for the client to be asking the solicitor to do the same thing.  The client would have been charged more for that.  The evidence was that the fees were dependent, as one would expect, upon the level of seniority ‑ ‑ ‑

KIRBY J:   Solicitors should not be charging solicitor’s fees at all if the solicitor is not really do solicitor’s work or giving advice.

MR MACFARLAN:   It was junior solicitor’s work, your Honour, and that is what they were charged for.  It was not senior expert solicitor’s work.

KIRBY J:   The solicitor was not doing a professional job at all, on what you are explaining to me.  The solicitor was simply a compiler of paper and a carrier of documents.

MR MACFARLAN:   No, your Honour, no.  There was considerable skill involved in examination of relevant documents on discovery to ascertain those that were relevant for the purpose of briefing counsel and the valuers, there needed to be discussions with counsel about what work needed to be done and how the steps were to be undertaken by the solicitor.  The point we make in particular, your Honours, is this, that her Honour made a finding which is at page 59 of the application book line 10 to this effect.  If your Honours would bear in mind that she is referring to a four year period from the commencement of the proceedings to the hearing in January 1990:

I find that once the Land and Environment Court proceeding was instituted, YPC looked to counsel, and in particular senior counsel, for legal advice as to the conduct of the proceeding and not to ATRK.

Now, in the Full Court their Honours did not mention that finding.  Their Honours did not turn their minds to what the retainer was during the relevant period.  They mentioned something that occurred before that period in 1984 or 1985 and what their Honours concluded is at 169 of the application book, line 17.  Relevantly the passage is at line 17:

But a solicitor with expertise in an area of the law cannot rely on counsel to the same degree.  Of course a solicitor expert in a field will also week the advice of counsel.  Sometimes he will do so to obtain a second opinion.  Sometimes the solicitor will be asked by this client to obtain counsel’s advice.  Sometimes the solicitor may be too busy to deal with a problem himself and for that reason will obtain the services of counsel.  But for whatever reason counsel’s advice is sought, when the specialist solicitor receives that advice he is well placed to consider it and form his own view about its correctness.  In our view there is no justification for the conclusion that he is absolved from that task merely because he has taken the advice of experienced counsel.

Your Honours, we would focus, by way of example, on the sentence which says:

Sometimes the solicitor may be too busy to deal with a problem himself.

The Full Court is saying that even in that circumstance, where the solicitor says that to the client, and with the concurrence of the client the solicitor briefs counsel to advise, the solicitor still has the duty to give the advice himself when he has told the solicitor he is too busy to do it.  Where that leads us, your Honours, is to say the Full Court erred because they did not have regard to the question of what the solicitor’s retainer was.

KIRBY J:   It is quite a significant question for the standards that are expected of the legal profession of Australia as to whether a solicitor can simply bargain out of the essential duties of the profession or is obliged to say, “Well, I don’t know about this and you have to go to someone who does”, because a client might well choose to go to somebody else who has the time or has the expertise.

MR MACFARLAN:   Your Honour, it is an important question ‑ ‑ ‑

KIRBY J:   It may be that the point is sufficiently important, even if this Court were to conclude with the Full Court that the court supervising, in a sense, the legal profession’s duties throughout the country, were to look at that question.  I suppose that is what you suggest to us.

MR MACFARLAN:   It is an important point, your Honour.

KIRBY J:   What do you say about the second point, that the Act has been introduced here and the law changed and that therefore the valuation principles do not really arise?

MR MACFARLAN:   Could I refer your Honours to tab 4 of the respondents’ documents that have been supplied to the court where the New South Wales statute is set out.  It is sufficient to refer to this by way of example.  What the legislation says in section 55 is that one looks at “market value” and in (b) “any special value of the land”.  Now, a consideration of that expression requires reference to the pre-existing law, or at least arguably so.

KIRBY J:   What do you say in relation to the third point concerning the clarity of the principles concerning the advocate, but they do not really help your clients?

MR MACFARLAN:   I am sorry, your Honour?

KIRBY J:   The principles relating to advocates do not really help your clients because far from being an advocate, your Mr Schwaiger, if that was his name, was not even being a full solicitor.

MR MACFARLAN:   Would your Honours please go to the finding of the Full Court at 178 of the application book, line 8.  I am sorry, could I ask your Honours to look at 170 first, line 5.  This is the finding of negligence against Abbott Tout:

we have no difficulty in reaching the conclusion that Abbott Tout was negligent in failing to advise Yates how its claim should properly be presented in the Land and Environment Court and what evidence should be led to substantiate its claim. 

Now, that is the same finding – or materially the same finding - as made against counsel and what the court was saying was that the solicitors had the same obligations as counsel.  With respect, your Honours, the distinction cannot be one between those who stand on their feet in court and those who do not, otherwise when junior counsel was led, junior counsel would suddenly be deprived of his or her immunity or if senior counsel were there and asked a junior counsel to take a witness ‑ ‑ ‑

KIRBY J:   The suggestion is the distinction is between those who are acting as advocate and those who are not.  You are acting as advocate even if you are sitting there with senior counsel, presumably not just carrying the books.

MR MACFARLAN:   Yes, your Honour.  The critical question is who is deciding, or advising upon, the way in which the case is conducted in court.  If the Full Court is correct here, the solicitors have that obligation in the same way that counsel did. 

As to the other aspect of immunity, your Honours, we would ask your Honours to bear in mind that there were no pleadings in the Land and Environment Court which defined the valuation issues.  The valuation case was defined by the reports of the valuers and the oral evidence of the valuers.

KIRBY J:   That is true, but the point that Mr Quick makes is that what an advocate says out of his mouth is planned weeks, months, maybe years before normally, whereas the whole point of having solicitors is that they will help with the planning, the preparation; instruction, it used to be called.

MR MACFARLAN:   The breach found by the Full Court must have been a continuing one, your Honour, because it was open to YPC through its legal advisers to lead relevant evidence and frame its case in the way the Full Court suggests up to a point well into the hearing because much of the valuation evidence was led orally in‑chief from the valuers and there was no pre-existing definition of the valuation ‑ ‑ ‑

KIRBY J:   Yes, but the suggestion is that it was the duty of the solicitors to address the attention of counsel, that they put themselves forward as experts in the area of land and environment valuation, and that they then gave it to a person who was not really expert and that they did not therefore, as it were, address counsel’s mind, give instructions and prepare the case in a way that would defend the interests of the client, which was the solicitors’ duty.

MR MACFARLAN:   On the immunity question, your Honour, the Full Court’s finding is to that effect, that the solicitors had to do the same as counsel.  There was no material distinction between their obligations.  If that be so, the breach of their duty must have been continuing through into the hearing.  But it bears a stark similarity, your Honours, to Keefe v Marks where there was an absence of a claim for interest and in the Court of Appeal of New South Wales it was held that the omission to claim interest was covered by the immunity because although there was a breach in the claim not being made well prior to the hearing, the breach was a continuing one because the claim could have been made any time up to and including the hearing.  The then Chief Justice found that immunity applied.  We relied upon that case in the court below here, but it is not mentioned in the judgment of the Full Court.  But there is a direct collision, your Honours, between the approach taken between the New South Wales Court of Appeal and the Full Court in this case, in the unfortunate circumstance that the Full Court has not mentioned, much less discussed, that decision of the New South Wales Court of Appeal.

Your Honours, the final point is this, that fundamental to the conclusion of the Full Court was the view that YPC had a head start.  Now, that was directly contrary to findings of her Honour which were not mentioned by the Full Court.  Those findings of her Honour included findings based upon credibility.

KIRBY J:   It does not strike me as a credibility case.  You might read with advantage what was said by the Court this week in SRA – State Rail Authority v Earthline Equipment.  I think we have to be a little bit careful that we do not push Devries into an overreach to cases that are really not credibility cases.

MR MACFARLAN:   Yes.  Our submission is not dependent on the fact that this was a finding as to credibility but it is enhanced by the fact that it is.  The way the credibility point arose was this, that there was a question as to whether Mr Yates or his company had finance available to proceed with the development as he alleged.  There was a very live issue at the hearing at first instance about that.  Her Honour resolved the question against Mr Yates and in so doing disbelieved Mr Yates.  Now, it was ‑ ‑ ‑

KIRBY J:   You say that hits at the foundation of the so-called head start argument as a matter of fact?

MR MACFARLAN:   Yes, your Honours, and I can show your Honours the conflict there.  In fact, in the written argument in this Court of the respondent they acknowledge that the finding of the Full Court is directly contradictory of that of her Honour.  But their Honours in the Full Court did not even mention it.

KIRBY J:   If you got special leave in this case, it would not be on that point.

MR MACFARLAN:   Can I take your Honours to that material.  It will not take a moment.

KIRBY J:   I am just saying that that would not be the sort of matter that we would go looking through on its own, if that was all you had.  I speak only for myself.

MR MACFARLAN:   As long as your Honours are not suggesting it be excluded from the appeal.

KIRBY J:   Oh no.  I am simply saying that it is not, of itself, enough.  It would not be enough.  It is simply the facts of this particular case and the way the court has dealt with it.  Unless the injustice required this Court to look at the matter, it would not seem to be enough.

MR MACFARLAN:   The issue of principle, your Honours, is that this was a case that went for a long time at first instance.  There was a huge amount of documentation.  There was a lot of oral evidence.  The transcript was close to 2,000 pages.  Yet we have the Full Court making a number of findings of fact without regard, certainly proper regard and in some cases

any regard, to the findings of her Honour at first instance.  We say it is a case in which the need for careful deliberation by appellate courts in such circumstances can be, and should be, stated.

Your Honours, I think that responds to the points put by my learned friend.

KIRBY J:   Yes, I think it does.  We will call on Mr Quick.

MR QUICK:   There are some matters in reply.  The first is that it is suggested by my learned friend that the retainer was limited in this case – that is the solicitors’ retainer was limited.  That matter was dealt with by the Full Court in its reasons at pages 162 to 163 of the application book.  They reject that proposition and they do so on the basis of the documentary evidence which was the same evidence as her Honour had to consider.  They held that there was no special ‑ ‑ ‑

KIRBY J:   Is there any credibility issue there?  Did her Honour rest her conclusion on accepting what the solicitor said?

MR QUICK:   No, definitely – I would have thought definitely not.  That is the first matter.  The second matter is that this is a case in which the solicitors – and this was also found by the Full Court, not a matter of contest – expressed expertise.  The expression of expertise brings with it the inference that expertise will be employed.  That is inconsistent with saying ‑ ‑ ‑

KIRBY J:   The suggestion is that it was qualified by the special arrangement, given the high quality of the valuers who were involved and the talent of the senior counsel.

MR QUICK:   In our submission, that would not necessarily be the case and it is reasonable to say, if we hold ourselves out as having expertise, and that is the basis upon which you will give us the job, we will exercise that expertise no matter what other expertise you have in the team.  That is the basis of the retainer point.

The second point made by my learned friend, Mr Macfarlan, deals with the valuation issue.  He referred the Court to section 55 of the New South Wales Act.

KIRBY J:   Why would the use of the word “special value” not bring in the previous learning on what special value meant?

MR QUICK:   Because if the Court would turn to the next page behind tab 4 in section 57, to which my learned friend did not refer, “special value” is actually defined, an exhaustive definition:

“special value” of land means the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person’s use of the land.

CALLINAN J:   How is that different from the concept as it was generally understood before statutory ‑ ‑ ‑

MR QUICK:   Because of the words “any advantage”, your Honour.  Any advantage at all.

KIRBY J:   It could not be wider.

MR QUICK:   It could not be any wider than – it is wider than ‑ ‑ ‑

KIRBY J:   Why will that not include the so-called head start?

MR QUICK:   As a matter of fact it may do so, but not as a matter of law.  Here we have a situation in which there is the widest possible scope for a court to take into account anything which it perceives as fact is a matter of advantage.

KIRBY J:   You cannot tell me that the courts will not look to the previous jurisprudence and say, “Well, it is any advantage, and the Court of Appeal in Yates said that includes head start advantage and therefore it is relevant in this case.”

MR QUICK:   With respect, your Honour, that is just a convenient way of saying head start is a tag that is given to a factual advantage.

KIRBY J:   I am only questioning whether it is irrelevant now.

CALLINAN J:   It does not answer his Honour’s question.  Once you put in “any advantage”, it must necessarily include such a factor as head start.

MR QUICK:   The fact is recognised.  It always has been available.  And calling it head start does not make it any more available than it was previously.

CALLINAN J:   The statute changes nothing.

MR QUICK:   In our respectful submission, it does, and it brings into play the principles enunciated in Bank of England v Vagliano, well-known principles. 

There are a couple of other points I want to make by way of – in relation to the suggestion that her Honour at first instance rejected that the developing corporation had the finance available to develop the market immediately.  That was a matter which was in contest before Justice Cripps and Justice Cripps did in fact hear evidence from the financiers and he did decide that issue and he decided it in favour of the developer.  Now, this case before her Honour was a case about a loss of a chance, a loss of a chance to do something before Justice Cripps.  It had been already decided by him.  It really was irrelevant that her Honour should have gone over the same ground – and she did not hear the evidence from the financier that Justice Cripps did.  It really was irrelevant, in a loss of a chance case, about what would have happened before his Honour Justice Cripps.

Sorry, I have just lost my book of ‑ ‑ ‑

KIRBY J:   The last point was the fact finding.

MR QUICK:   Thank you, your Honour.  I am terribly embarrassed.  I cannot find my notepad.

KIRBY J:   The suggestion was that there was a Devries bar upon the Full Court’s intervention in the issues of fact finding which had gone against you before the primary judge.

MR QUICK:   Your Honour, there are two things about that.  The first is the evidence was overwhelmingly documentary, but I do concede there was substantial oral evidence, about 1,200 pages of it actually.  But the Full Court was aware of its special position.

KIRBY J:   It suggests that Mr Yates was not believed by the primary judge in respect of the availability of finance.  That was the point that was made.

MR QUICK:   It was not that he was not believed; it was just that – the oral evidence which he gave before the judge was inconsistent with some documents which were presented to her Honour.  She therefore was not prepared to find, as Justice Cripps had done, closer to the time of relevant events, having heard evidence from a relevant financier, she was not prepared to make the same finding that he had made, it being of crucial importance that this was a loss of a chance case, and she directed herself to the issue of whether or not finance was in place, whereas the real issue was what were the chances of the court accepting that there was a head start because finance was in place and the fact of that matter had been determined by Justice Cripps.

CALLINAN J:   Can you assist me with this on the facts?  Justice Cripps, I think said, when the matter went back to him, that he had made allowance for this factor in the sum of half a million dollars.  Is that right?

MR QUICK:   Yes, your Honour, that is correct.

CALLINAN J:   Now, in what respects is it said that his Honour was precluded from making allowance for something that could, and should, have been, but was not, the subject of material brought forward by the ‑ ‑ ‑

MR QUICK:   Yes, I can assist your Honour in relation to that.  His Honour made that allowance without any evidence at all of the value of the head start.

CALLINAN J:   Let me stop you there.  If his Honour made that allowance, on what did he make it?  How could he make the allowance without any evidence at all?

MR QUICK:   He had evidence, your Honour, of the facts which give rise to the head start:  the nature of the development, the type of work that was involved, but he had no evidence from a valuer as to whether or not that would give additional value in the hands of the dispossessed owner, whether that was worth dollars and, if so, how much.

CALLINAN J:   Did his Honour make a finding, when the matter went back to him, that had he had that evidence – I know he told the parties they could not adduce that evidence, is that right?

MR QUICK:   That is so.

CALLINAN J:   Did his Honour say that his view about the matter would have been different had that evidence been adduced before him?

MR QUICK:   As I understand it, his Honour said nothing about that at all.

CALLINAN J:   Did his Honour give reasons as to why he would not receive that evidence?

MR QUICK:   Yes, his Honour did.

CALLINAN J:   Where do I find those?

MR QUICK:   I am not sure whether it is part of the application books, but the reasons were twofold.  He said first of all I already have taken this matter into account and, secondly, the type of evidence that you are trying to lead now is inconsistent with the basis for valuation which I have already – I am sorry – the basis upon which you are putting this forward has already been rejected by me in dealing with another aspect of your claim.

CALLINAN J:   That is contradictory, is it not?

MR QUICK:   It is, but what we are complaining about here is not the judgment of Justice Cripps but whether or not we were deprived, in the loss of a chance case, of an assessment of Justice Cripps on all of the evidence from the outset, not from the end.

CALLINAN J:   But if, in fact, one is to take the first proposition that you say Justice Cripps found, and leaving aside what appears to be a contradictory proposition, then that evidence would not have made any difference.

MR QUICK:   No, your Honour, our case was this.  There were several cases that could have been put in the alternative.  The crucial one was omitted and was not put at all.

CALLINAN J:   That is what everybody says after the event, of course.

MR QUICK:   In this case there is substantial reason for saying so, in fact Queen’s Counsel gave evidence to the fact that this evidence should have been sought and called.

CALLINAN J:   The view was expressed by the Full Federal Court, with which, I must say, I have some sympathy, that probably evidence should not have been led from lawyers at all, that this was a matter for the court, and there was evidence the other way anyway, because both sides called senior counsel, did they not?

MR QUICK:   Yes, your Honour.  The issues were slightly different. 

CALLINAN J:   All of this really, in a sense, highlights what anybody who has ever done a valuation case well knows, that it is often a very nice decision that you have to make as to the way in which you present a particular case.  And afterwards one might say, “Well, I wish I’d presented it differently.”  You see, I notice, for example, that the Full Federal Court here was critical of some of the principles that were stated by the Court of Appeal and, indeed, the Full Federal Court said, in effect, as I read their reasons, there was preferable Canadian authority.

KIRBY J:   Which was not brought to the notice of the ‑ ‑ ‑

MR QUICK:   That is true, that was not brought to the attention – the Full Court judgment makes that point.

CALLINAN J:   Rather unusual, in a sense, that one court of parallel jurisdiction, if I can put it that way, is making that sort of comment about another court.

KIRBY J:   Perhaps they just knew that I was always fascinated by Canadian authority.  But I suppose your point is that the problem in this case was that the solicitors – the young solicitor who was assigned – did not turn their attention at all to the matter.

MR QUICK:   That is right, and if it had happened at the outset when the cases had been presented in the alternative, there might have been a completely different attitude by Justice Cripps.

KIRBY J:   Yes.  I think you have had your time.

MR QUICK:   I have.  If the Court pleases.

KIRBY J:   If the Court were minded to grant special leave in the case, would it be in any way unfair to you that we did so without having heard you on Mr Webster’s case?

MR QUICK:   Different considerations do ‑ ‑ ‑

KIRBY J:   I realise that, but they are interconnected to some extent and I would not want to make the decision on this case if you suggested that it was interrelated sufficiently that you should be heard in the Webster case before we make a decision on this case.

MR QUICK:   Oh, I beg your pardon, your Honour.  I misunderstood.  No, there is no reason why the Court should not make a decision on this case.

KIRBY J:   Very well, thank you. There will be a grant of special leave in this application.

MR MACFARLAN:   If the Court pleases.

KIRBY J:   Obviously there will be a need for directions so that the Court can come at the problems in a way that is economical of the Court’s time, having regard to the defined issues that have been raised and the very large amount of material that would potentially be placed before the Court which may be irrelevant to the defined issues.

MR MACFARLAN:   Yes, your Honour.

MR QUICK:   Your Honour, there may be a notice of alternative contention also raised in this case in connection with the possibility of a challenge to the existence of the immunity at all, bringing into question the correctness of the decision in Giannarelli v Wraith.

KIRBY J:   I see.  You did not mention that earlier. 

MR QUICK:   Leave has now been granted.

KIRBY J:   Yes, it is entirely appropriate that you should signal that and Mr Macfarlan is now on notice of it.  The Registrar will be in touch with the parties concerning the listing of the matter for directions.

Now, Mr Walker, you are in the matter relating to Mr Webster.  Again, I think we would be advantaged if we heard from you first, Mr Quick.

MR QUICK:   If the Court pleases.  Again, in this case, the applicant for special leave advances a number of grounds for special leave, two of which have already been dealt with in the previous application, namely ‑ ‑ ‑

KIRBY J:   Would it not be an unfairness to Mr Webster, having granted special leave in the other case, to not allow him to be heard and to fix him with the judgment which has been entered against him, which may itself then be disturbed but be beyond the reach of the judicial system?  That is what I had in mind in asking whether we should have heard you on this one before we heard Mr Webster’s case.  But having decided that it should be granted to Mr Webster’s case, with the possibility that that will result in the setting aside of the judgment against the solicitors , could it not then be a sense of grievance – a justifiable sense of grievance – on Mr Webster’s part that he has not been heard by the Court to attack the judgment against him.

MR QUICK:   The point that I was attempting to come to grips with is the leave that was given, I do not know whether or not the leave is unrestricted and ‑ ‑ ‑

KIRBY J:   It is unrestricted.  It is only restricted if we say so.  We did not.

MR QUICK:   That being the case, then I think that the issues having been raised in the Abbott Tout application, it probably would be unfair in the circumstances your Honour suggested.

KIRBY J:   Very well, there will be a grant of special leave in this case as well.

MR QUICK:   On those aspects.  There are other aspects and I would ask the Court to deal with those aspects, and perhaps to limit the special leave in this case, the other aspects being matters which were not the same as in the Abbott Tout case.

KIRBY J:   You might just make clear the matters that are different.

MR QUICK:   The first is the question of immunity.  The immunity case is quite different from the immunity case ‑ ‑ ‑

KIRBY J:   If you have signalled that you are going to raise a notice of contention challenging the basis of counsel’s immunity, it would be a little unfair to Mr Webster, and unhelpful to the Court, that we would embark upon such an issue without a party who has an interest to contest it.

MR QUICK:   Your Honour, it would still be open to the Court to say, this is not an appropriate case in which to determine ‑ ‑ ‑

KIRBY J:   But you counter‑argue the point.  It would be really a self-inflicted wound if we were then to deprive ourselves of a party who has a real motivation to uphold the immunity and to have it given an ample construction.

CALLINAN J:   And for my own part, I cannot see how the appeal in respect of which special leave has been given can possibly be argued without looking perhaps at the correctness of the decisions of Justice Cripps and of the Court of Appeal as well as the Full Federal Court.  In other words, I would be very surprised if the appellants did not attack the correctness of those decisions to the extent that they held that the valuations and the preparation were flawed.

Mr Walker, you will be arguing that, will you?

MR WALKER:   That is correct.  Your Honour appreciates that we would only have to aim as high as to say that result does not prove any negligence on our part, that one’s reach always seems to exceed one’s grasp and we would certainly say it is wrong.

CALLINAN J:   Taking into account that it may not be enough for the respondent to establish that professional minds might have differed reasonably on what was the appropriate approach.

MR WALKER:   Yes, your Honour, precisely.

KIRBY J:   I would not be put in a position, would I, Mr Walker, of sitting on appeal from my own decision?

MR WALKER:   No more embarrassment than your Honour, as your Honour’s career goes on, has in having to consider any submissions that we put to you about any of your decisions.  No embarrassment at all, your Honour.

KIRBY J:   Mr Quick, how can we really sever this?  I mean, are there any other points that you wish to raise that are severable?

MR QUICK:   Would your Honour just pardon me a moment while I check through my notes.  I realise the difficulty the Court raises.

CALLINAN J:   For my own part, Mr Quick, I do not want to cut you short on anything, if you think that there is a different consideration that you should put.

MR QUICK:   There are some different considerations that apply in relation to the immunity matter, but as the Court points out, if we are going to challenge the existence of the immunity at all completely, as we may well do in the other matter, there may not be so much point in raising them.  But the main point about the immunity situation in relation to Mr Webster’s case is that the work that he was doing was very different from the work normally undertaken by counsel.  Now, the Full Court, in their reasons, went through that very carefully at pages 173 to 175 and they pointed to the fact that Mr Webster was in the matter right from the beginning and his role was unusual – they describe a role which our submission is it is unusual.  Page 173 line 20, speaking of Mr Webster, the court said:

He was junior counsel in the case from its commencement.  He was involved in every aspect of its preparation for trial.  He appeared in many ‑ ‑ ‑

CALLINAN J:   Mr Quick, my recent experience at the Bar was that in big cases, particularly I might say in New South Wales, it has become a normal part of the preparation process for junior counsel to be involved from the inception.  I do not myself see anything unusual in that at all.

MR QUICK:   Your Honour, it is to be combined with the fact that he was a person who was expert in this – had qualifications in this jurisdiction outside of his qualifications as counsel and, further, he was working with a solicitor who was known not to have much knowledge or experience in this area at all.  He was involved in directing the minds of the valuers – or he had the opportunity to and was there when the valuers were doing it – when they were going about gathering their evidence; something that would normally be done by the solicitors.

CALLINAN J:   Is there not some case – I have been trying to think of it – which holds that it is not proper – whether one thinks the case is correctly decided or not – but that it is not proper for counsel or solicitors to settle expert’s reports?

MR QUICK:   Your Honour, I cannot tell you the name of the case ‑ ‑ ‑

CALLINAN J:   But there is such a case, is there not?

MR QUICK:   There is authority – it is not very recent and the current practice is, as far as I am aware, that it is often the case that expert’s reports are settled in conjunction with counsel, provided it still remains the opinion of the expert.

CALLINAN J:   Yes.  If there is authority to that effect, whether it is correct or not or whether practice departs from it, it highlights perhaps the ambiguity of people’s roles in these sorts of situations.

KIRBY J:   If it is English authority, it may be that we have never followed quite as strictly the view of counsel’s relationship with witnesses as they do in England, where it is very strict.

MR QUICK:   I must confess I have not looked at the authority for the purpose of today’s hearing.

CALLINAN J:   I cannot tell you what it is at the moment, Mr Quick.  I see one of your juniors was nodding.  He may know it.

MR RAPHAEL:   It is a decision of Lord Denning.  I cannot bring the name of the case to mind, but it is late 60s or early 70s.

MR QUICK:   So the first thing we draw attention to is that the involvement of Mr Webster was, from the outset, more extensive than is normally the case.  He had additional experience than normally counsel would have because of his valuation experience.  The solicitor who he was working with had very little or no experience.

KIRBY J:   We know all this, but the question is do we lock him out from having his opportunity to address the Court.  What issue does this go to that deserves to be severed and thrown away, so that he does not get a chance to be heard on the issue?

MR QUICK:   The issue will be ventilated in the other appeal.  The question is really whether or not ‑ ‑ ‑

KIRBY J:   It will be, and if he is affected by it, he should be heard.

MR QUICK:   He will not be affected by that appeal; the question is whether or not there should be an additional appeal in relation to a point which is not exactly the same, but about which there are unusual features which would make this ‑ ‑ ‑

KIRBY J:   It is a valiant effort, Mr Quick, but for the life of me I do not see why, if we have granted leave in the other case, we would not grant a general leave in this case to hear what Mr Webster says and he may help the Court, the interrelationship with the two cases to each other, the debates relating to the scope of the retainer, all of these things are interconnected and one has to look down the track as to how the Court will be assisted to come to the right and just decision, without putting Mr Webster out of court in his challenge to the judgment against him.

MR QUICK:   I think I can assist the Court probably by finishing, because I think there is nothing further that I can really add and I do not want to take up the Court’s time unnecessarily.  If the Court pleases.

KIRBY J:   The Court does not need your assistance on this occasion, Mr Walker. 

There will be a grant of special leave in Mr Webster’s application and the same remarks apply. As I said earlier, the matter will have to be listed for directions in order that the issues can be presented to the Court in a way that is economical of the Court’s time.

AT 4.23 PM THE MATTER WAS CONCLUDED