Byrne v Turner Freeman Lawyers and Casselden
[2025] NSWDC 5
•13 February 2025
|
New South Wales |
Case Name: | Byrne v Turner Freeman Lawyers and Casselden |
Medium Neutral Citation: | [2025] NSWDC 5 |
Hearing Date(s): | 31 October 2024 |
Date of Orders: | 13 February 2025 |
Decision Date: | 13 February 2025 |
Jurisdiction: | Civil |
Before: | Cole DCJ |
Decision: | (1) Pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 14.28, the Statement of Claim filed on 31 May 2024 (Statement of Claim) is struck out. |
Catchwords: | CIVIL PROCEDURE — Pleadings — Striking out — No reasonable cause of action – Tendency to cause embarrassment – Abuse of process |
Legislation Cited: | Civil Liability Act 2002 (NSW) |
Cases Cited: | Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 |
Category: | Procedural rulings |
Parties: | Robert Byrne (Plaintiff) |
Representation: | Counsel: |
File Number(s): | 2024/202126 |
Publication Restriction: | Nil |
JUDGMENT
The Statement of Claim in this matter was filed by Mr Robert Byrne on 31 May 2024. A Notice of Motion was filed by the first defendant (Turner Freeman) on 2 September 2024 and a Notice of Motion was filed by the second defendant (Mr Casselden SC) on 10 September 2024. Both Notices of Motion sought the following orders:
(1)Pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 14.28, the Statement of Claim filed 31 May 2024 (the Statement of Claim) be struck out.
(2)Alternatively to prayer 1, pursuant to UCPR r 14.28, paragraphs 8, 9, 12, 17, 23, 24, 25 and 27 of the Statement of Claim be struck out.
(3)Pursuant to UCPR r 13.4(1)(b) the proceedings be dismissed.
(4)Costs.
(5)Such further or other orders as the court considers ought to be made.
At the hearing of the Notices of Motion, Turner Freeman and Mr Casselden relied upon an affidavit of Mr Baron Alder dated 2 September 2024 (“Mr Alder’s affidavit”) and an affidavit of Mr Gabriel Hernandez dated 13 September 2024 (“Mr Hernandez’s affidavit”) which was filed in Mr Byrne’s case.
At the hearing, Mr Scott objected to the tendering of Mr Alder’s affidavit on the basis of relevance. I ruled that I would consider both of the affidavits relied upon because their content and attachments were obviously relevant to the issues raised on the Notices of Motion, in ways which will become obvious below. I bear in mind the oft-quoted words of Kirby P (as he then was) in Wickstead v Browne (1992) 30 NSWLR 1 at pp 5 – 6:
Common experience teaches that it is usually more efficient and just to consider the viability of a cause of action when the facts said to support it are adduced and the suggested action can be judged with a full understanding of all relevant evidence. Testimony gives colour and content to the application and development of legal principle.
The allegations in the Statement of Claim
The following allegations are made in the Statement of Claim:
(1)Turner Freeman and Mr Casselden acted for Mr Byrne in proceedings in 2014 (“the 2014 proceedings”).
(2)A mediation was held in the 2014 proceedings on 31 May 2018. Turner Freeman and Mr Casselden represented Mr Byrne at the mediation. During the mediation, Mr Byrne signed two documents: a “Heads of Agreement” and a “Settlement Authority”.
(3)Turner Freeman and Mr Casselden had a duty to take reasonable care when advising him “about the proposed terms of settlement recorded in the heads of agreement”. This duty of care required both Turner Freeman and Mr Casselden to advise Mr Byrne “about his rights should the defendant to the 2014 proceedings (the Owners Corporation) fail to perform its obligations in sufficient time to keep the hearing date of the trial, before Mr Byrne signed the document”. In breach of their duty of care, Turner Freeman and Mr Casselden failed to so advise Mr Byrne.
(4)Had Mr Byrne been advised (paragraph 10):
… about his rights should the Owners Corporation fail to perform its obligations in sufficient time to keep the hearing date of the trial, then Mr Byrne would not have given instructions to settle “in those terms” but would have instead instructed the plaintiff’s lawyers to negotiate appropriate amendments to ensure all rectification work was done before trial and without losing the right to go to trial and obtain judgment if necessary, failing which the matter would not have settled and instead proceed to trial.
(5)The District Court of New South Wales vacated the trial of the 2014 proceedings because they had settled.
(6)In 2020, Mr Byrne sued the Owners’ Corporation in the Supreme Court, seeking “specific performance of its obligations arising out of the settlement of the 2014 proceedings together with damages for breach of contract and costs”.
(7)The Supreme Court ordered specific performance of the Owners’ Corporation’s “obligations arising out of the settlement of the 2014 proceedings”. Damages were also awarded, together with costs.
(8)Turner Freeman and Mr Casselden each had a duty of care to disclose to Mr Byrne a reasonable estimate of legal costs payable by Mr Byrne “If the 2014 proceedings is settled”, and a reasonable estimate of the contribution towards those costs likely to be received from another party.
(9)Had Mr Byrne known that the quantum of legal costs “was about $100,000 more than the $300,00 written” in the settlement authority, “Mr Byrne would not have given instructions to settle for $500,000 inclusive of costs, but would instead have instructed the plaintiff’s lawyers to offer $500,000 plus costs as agreed or assessed, failing which Mr Byrne would have instructed his solicitors to proceed to trial.”
(10)Further allegations and assertions are made, including allegations and assertions concerning loss.
The Heads of Agreement of 31 May 2018 is annexed to Mr Alder’s affidavit and Mr Hernandez’s affidavit. Clause 11 of the Heads of Agreement says:
11. The parties are to execute a Mutual Deed of Release and Settlement recording the terms of this settlement with signed counterparts to be exchanged by 5.00pm, Friday 15 June 2018.
The executed Deed of Settlement and Release dated 10 September 2018 (“the Deed of Settlement”) was annexed to Mr Hernandez’s affidavit. Clause 12 of the Deed of Settlement says:
12. Entire Agreement
This Deed sets out the entire agreement between the parties about the subject matter of this deed and supersedes any representation, negotiations, arrangements, understandings or agreements and all other communications.
The Uniform Civil Procedure Rules 2005
Both of the defendants rely upon the Uniform Civil Procedure Rules 2005 (“the UCPR”) rules 13.4 and 14.28:
13.4 Frivolous and vexatious proceedings
(cf SCR Part 13, rule 5; DCR Part 11A, rule 3; LCR Part 10A, rule 3)
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings—
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1).
…
14.28 Circumstances in which court may strike out pleadings
(cf SCR Part 15, rule 26; DCR Part 9, rule 17; LCR Part 8, rule 3)
(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading—
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or
(c) is otherwise an abuse of the process of the court.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1).
Turner Freeman’s submissions on the application to dismiss the proceedings and Mr Byrne’s responses
In support of its application for the Statement of Claim, or parts of it, to be struck out, Turner Freeman argued that the Court must consider the importance of the pleadings, particularly in enabling the opposing party to know the case they must meet. The need to facilitate the just, quick and cheap determination of the real issues in the proceedings is also a relevant consideration (see The Owners – Strata Plan No 82089 v Omaya Holding Pty Ltd [2024] NSWSC 992 at [70]).
In Dickens v State of New South Wales (No 3) [2018] NSWSC 485, Adamson J said at [36] and [38]:
36. The importance of pleadings ought not be underestimated. A statement of claim serves a number of functions. It indicates, to the Court and to the defendant or defendants, the basis of the plaintiff’s claim for relief. The statement of claim must set out, in numbered paragraphs, the material facts on which the plaintiff relies (UCPR rr 14.6 and 14.7). Where the rules require that certain matters be particularised (such as allegations of fraud or states of mind), the statement of claim must contain those particulars. It is an aspect of natural justice that the defendant be apprised of the case it has to meet by a properly pleaded statement of claim: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [25] (French CJ, Gummow, Hayne and Kiefel JJ). Where unparticularised allegations of fraud and intention are made, there can be a tendency for the deficient pleading to amount to an abuse of process. Pleadings must be consistent, except where allegations are expressed to be in the alternative: UCPR 14.18. A pleading must not be “embarrassing” in any of the senses set out by Tamberlin J in Shelton v NRMA Ltd [2004] FCA 1393; 51 ACSR 278 at [18]:
“‘Embarrassment’ in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense.”
…
38. Where a statement of claim is deficient, in that it does not identify the connection between allegations of fact and causes of action alleged; contains a discursive narrative, the relevance of which can only be the subject of conjecture; and makes generalised allegations which could not sensibly be the subject of a response in the defence, it cannot be allowed to stand, if objection is taken. Although there are occasions where a defendant, for forensic reasons, might not take objection to a deficient pleading and prefer to conduct the proceedings on that basis, a defendant who approaches the Court to enforce its rules regarding a pleading is entitled to have the Court require compliance: Northam v Favelle Favco Holdings Pty Ltd (Unreported, Supreme Court of New South Wales, Bryson J, 7 March 1995).
In support of its application for the summary dismissal of the proceedings, Turner Freeman relied upon the decision in Shaw v State of New South Wales (2012) 219 IR 87; [2012] NSWCA 102, in which Barrett JA, with whom Beazley, McColl and Macfarlan JJA and McClellan CJ at CL agreed, at [30] - [32] elaborated on the General Steel test for summary dismissal:
Triable quality
30. I have said that the "triable quality" of the three matters just mentioned is in issue. There is no dispute that the central inquiry is that indicated by Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62, General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125 and, more recently, Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 where Gaudron, McHugh, Gummow and Hayne JJ said at [57]:
"Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way."
31. That formulation has since been re-affirmed: see Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 at [46]; Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [24]; and, while it was said in Batistatos that the General Steel formulation should not be given "canonical force", it is convenient, for present purposes, to refer to the criteria laid down by the case law I have mentioned as the "General Steel test".
32. The question is therefore whether the claims in question are so obviously untenable or groundless that there is "a high degree of certainty" that they will fail if allowed to go to trial; and whether this is one of the "clearest of cases" in which the court may accordingly intervene to prevent the claims being litigated.
Turner Freeman argued that there are at least seven deficiencies in the Statement of Claim.
Firstly, the claim for negligent advice in relation to the Heads of Agreement of 31 May 2018 (“the Advice claim”) is premised on there having been a breach of an obligation by the Owners’ Corporation. However, that alleged breach is not particularised. Even if it can be assumed that the breach is a breach of a clause of the Heads of Agreement neither the relevant clause nor the conduct which allegedly constituted the breach is pleaded or particularised.
Turner Freeman relied upon Mr Alder’s affidavit. Correspondence attached to Mr Alder’s affidavit shows that Turner Freeman has sought particulars of the way in which it is alleged that the Owners’ Corporation failed to perform its obligations. In its written submissions, Turner Freeman said:
The plaintiff has failed to provide those particulars, and rather has variously:
a. declined to provide the particulars on the alleged basis that the Solicitors’ request is not a proper request for particulars;
b. asserted that how the Owners’ Corporation failed to perform its obligations is not a material fact; it is the fact that the Owners’ Corporation failed to perform its obligations that is material; and
c. said that how the Owners’ Corporation breached its obligations:
“will become apparent to the Defendants once the parties have obtained access orders from the District Court of NSW, after the Supreme Court of NSW has transferred that file to them.”
Turner Freeman submitted that it was therefore apparent that the plaintiff does not know and cannot plead how it is alleged that the Owners’ Corporation is said to have breached any obligation under the Heads of Agreement or at all. It was submitted that if the plaintiff were able to plead this material fact, he would have done so, consistent with his duties under s 56 of the Civil Procedure Act 2005 (NSW) and the requirements of UCPR rules 14.7 and 14.14.
Turner Freeman cannot plead properly to the allegation in its present form. Turner Freeman must be told how it is that the Owners’ Corporation is said to have breached an obligation it owed to Mr Byrne. As Turner Freemen does not know what breach is alleged, it cannot investigate and determine what evidence should be led in response to the allegation.
It is argued that this is fatal to the Advice Claim. There is no utility in considering any amendment to the Statement of Claim on the part of Mr Byrne if he is unable to plead or particularise the clause of the Heads of Agreement allegedly breached and the conduct constituting the breach.
In his written submissions, Mr Doyle Gray’s response to this argument was that the first defendant’s frequent use of the word “particulars” could be “characterised as an obsessive compulsion”. Further, it was said that the argument did not apply common sense as required in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 (see [85], below).
I determine that the pleading in paragraphs 7 and 12 of the Statement of Claim is embarrassing in the sense that it is susceptible of various meanings, none of which are obvious upon a reading of the relevant documents.
Secondly, it is alleged, in the context of the Advice claim, that Turner Freeman and Mr Casselden SC “failed to advise Mr Byrne, adequately or at all, about his rights should the Owners’ Corporation fail to perform its obligations in sufficient time to keep the hearing date of the trial”. Turner Freeman argued that this allegation was misconceived. The Heads of Agreement said that practical completion of the rectification and remedial building works was to take place no later than 30 June 2018, time being of the essence. In other words, even if the Heads of Agreement did impose an obligation upon the Owners’ Corporation, that obligation was to complete the works well prior to the hearing date allocated to the 2014 proceedings. In the letter of Mr Khan referred to above, at paragraph 7 (h)(iii), the trial date in the District Court was said to be 22 October 2018.
It was further argued that the Advice Claim was misconceived because a Deed of Settlement and Release (“Deed of Settlement”) was executed on 10 September 2018 by Mr Byrne and by the Owners’ Corporation. The Deed of Settlement clearly relates to the same subject matter as the Heads of Agreement and has the same parties. The Deed of Settlement provides, in clause 12:
12 Entire Agreement
This Deed sets out the entire agreement between the parties about the subject matter of this deed and supersedes any representations, negotiations, arrangements, understandings or agreements and all other communications.
Turner Freeman submitted that the Advice Claim must fail, given that, even if it could be argued that some obligation was imposed on the Owners’ Corporation by the Heads of Agreement (which is denied), after 10 September 2018, with Mr Byrne’s express agreement, the Heads of Agreement did not govern the rights and obligations of the parties to the 2014 proceedings because it was superseded by the Deed of Settlement.
In his written submissions, Mr Doyle Gray argued that Turner Freeman had confused the claim about advice that was given with the content of the documents on which advice was given. He said “The advice, not the contents, are the subject of Mr Byrne’s claim”.
Mr Doyle Gray’s argument is misconceived. The Statement of Claim relies upon a conclusion about the relationship between Mr Byrne and the Owners’ Corporation immediately prior to entering into the Heads of Agreement, so the content of that document, which is relevant to its effect and the relationship of the parties leading up to its execution, is critical.
The Statement of Claim does not apprise the defendants of the case they are to meet. The pleading of the Advice Claim is vague and omits relevant facts. It is capable of many interpretations.
Thirdly, it was argued that the matters required to establish a claim in negligence under the Civil Liability Act 2002 (NSW), including those specified in s 5B, are not pleaded in the Statement of Claim. The Civil Liability Act 2002 (NSW) says, in s 5B:
5B General principles
(1) A person is not negligent in failing to take precautions against a risk of harm unless—
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things)—
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.
The written submissions on behalf of Mr Byrne, in response to this argument, said:
… it is tolerably if not patently clear from a proper reading of the statement of claim…a solicitor’s client is at risk of harm by agreeing to a settlement he does not properly understand, and Mr Byrne was at risk of that harm at the mediation.
This submission is not responsive to the argument put by Turner Freeman. It also does not relate directly to any claim made in the Statement of Claim.
I agree with Turner Freeman’s submission that the claim in the Statement of Claim referred to as the Advice Claim does not comply with s 5B of the Civil Liability Act 2002 (NSW). There is no reference to the foreseeability of a risk in the Statement of Claim.
Fourthly, no material facts are pleaded to form the basis for the allegations pleaded in the claim concerning the Settlement Authority (paragraphs 19 to 28 of the Statement of Claim).
Mr Doyle Gray’s submission on this point was simply that “it may be observed” that Turner Freeman’s “submissions themselves state no facts from which one might conclude that submission is not devoid of merit”. Again, this is not responsive to Turner Freeman’s argument. As Mason CJ and Gaudron J said in Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at [18]:
18. The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In Liquidation) [1916] H CA 81; (1916) 22 CLR 490, per Isaacs and Rich JJ. at p 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.
Fifthly, it is argued that the two losses of opportunity pleaded for the Settlement Authority Claim (Statement of Claim paragraph 26) are inconsistent with each other and with the loss of opportunity pleaded in respect of the Advice Claim (Statement of Claim paragraph 16) and they are not pleaded in the alternative. This is not permissible under UCPR r 14.18, which says:
14.18 Pleadings to be consistent as to allegations of fact
(1) A party must not in any pleading make an allegation of fact, or raise any ground or claim, inconsistent with any of his or her previous pleadings.
(2) Subrule (1) does not affect the right of a party to make allegations of fact, or raise grounds or claims, in the alternative.
In his written submissions, the plaintiff simply did not address the application of UCPR r 14.18 to his pleading, and said “it may be observed that a series of counterfactuals will always be inconsistent with one another precisely because they are counterfactuals” and said it was a matter for the trial judge to adjudicate.
The submissions for the plaintiff do not demonstrate an understanding that it is for him to formulate and state his case with sufficient clarity to enable the defendants to meet his case at the pleadings stage. It is not for the defendants or the trial judge to infer or guess what the plaintiff’s case might be.
Sixthly, the loss alleged on account of the asserted loss of opportunity (Statement of Claim paragraphs 18 and 28) is “unclear and untethered to any factual allegations otherwise pleaded in the Statement of Claim”.
In other words, the nexus between the allegations preceding paragraph 18 and the loss asserted in paragraph 28 has not been pleaded.
The plaintiff’s response to this argument, in his written submissions, is to point to the text preceding paragraphs 18 and 28 and say that it should be read “until one sees the connection between (1) paragraphs 12-18 and (2) paragraphs 25–28”.
Again, the plaintiff’s response does not address the defect identified. The nexus between the allegations and the loss pleaded has not been articulated properly in the Statement of Claim.
Seventhly, the Statement of Claim does not allege that the loss that the plaintiff allegedly suffered was caused by the defendants’ alleged breaches of duties. Turner Freeman submits, correctly, that “A pleading that loss occurred ‘in the premises’ of certain preceding paragraphs (see Statement of Claim at [16] and at [26]) does not alleged that the matters pleaded in those paragraphs caused the alleged loss”.
In his written submissions, the plaintiff says that it is not necessary to use the word “caused” and says, in effect, that the pleading in the Statement of Claim is sufficient to make it clear that it is alleged that the defendants’ alleged breaches of duty caused the plaintiff’s asserted loss.
There is a factual lacuna in the Statement of Claim, which is set out below, which fortifies Turner Freeman’s submission. As I have said, the nexus between the partially pleaded Advice Claim and the loss asserted has been incompletely pleaded and can be interpreted in numerous ways. The same is true with respect to the Settlement Authority Claim.
For these seven reasons, Turner Freeman submits that the Statement of Claim does not disclose a cause of action.
In relation to the Advice Claim, it is argued that the plaintiff’s concession that it is unable to plead the factual allegations in paragraph 12 of the Statement of Claim with the requisite specificity, together with the “factual misconceptions” in the claim should result in the dismissal of the proceedings.
In relation to the Settlement Authority Claim, it is argued that the absence of any pleaded material facts capable of forming a basis for the allegations of a breach should result in the dismissal of the proceedings.
I accept these submissions.
Turner Freeman’s submissions on the application to strike out the Statement of Claim and Mr Byrne’s responses
The Statement of Claim, in paragraph 8, says that, before the Heads of Agreement were signed, “the plaintiff’s lawyers advised Mr Byrne about the proposed terms of settlement recorded in that document”. However, it was argued, the Statement of Claim does not plead or particularise:
a. the content of the advice allegedly provided;
b. whether it is alleged that advice was provided orally or in writing or a combination of the two; and
c. whether the alleged advice was provided by the Solicitors or the second defendant or both.
Turner Freeman have sought these particulars from Mr Byrne. They have not been provided. It has been asserted by Mr Byrne’s solicitors that the advice provided is not a material fact. Turner Freeman argues that, if it is not a material fact, paragraph 8 of the Statement of Claim should be struck out.
Paragraph 8 of the Statement of Claim goes on to allege that “the plaintiff’s lawyers” failed to advise Mr Byrne adequately or at all “about his rights should the defendant in the 2014 Proceedings (the Owners Corporation) fail to perform its obligations in sufficient time to keep the hearing date of the trial”. The nature and content of the Owners’ Corporation’s obligations is not pleaded, and neither is the nature and content of Mr Byrne’s asserted “rights”. Turner Freeman submitted that “The advice which the plaintiff contends he ought to have been given is plainly a material fact in a claim for professional negligence. The current pleading of this is ambiguous and so general as to prevent the Solicitors from knowing the case against them, and should be struck out.”
In his written submissions for the plaintiff, Mr Doyle Gray submitted that the material facts regarding the Owners’ Corporations’ obligations under the Heads of Agreement “are irrelevant”.
I accept Turner Freeman’s submissions. The Statement of Claim should particularise the rights Mr Byrne is asserting. The advice that it is claimed that the first and second defendants should have given but did not give should also be particularised in the context of the advice actually given.
Paragraph 9 of the Statement of Claim asserts a breach of a duty of care in reliance on the premises alleged in paragraph 8. Paragraph 8 does not adequately identify the breach relied upon. Paragraph 9 should therefore also be struck out.
Paragraph 12 of the Statement of Claim alleges that “the Owners Corporation failed to perform its obligations in sufficient time to keep the hearing date and proceed to trial”. For the reasons summarised above, Turner Freeman submitted that paragraph 12 is embarrassing and should be struck out.
Paragraph 17 of the Statement of Claim says:
Mr Byrne suffered harm by incurring the cost of, and delay occasioned by, the 2020 Proceedings.
It is not clear what delay was “occasioned by the 2020 Proceedings”. It is not stated how any such delay is causally related to the facts pleaded in the Statement of Claim.
Paragraph 23 of the Statement of Claim pleads that, prior to the signing of the Settlement Authority, “the plaintiff’s lawyers” failed to advise him that:
a. the amount of legal costs payable by the plaintiff if the District Court Proceedings was settled (including any legal costs of another party the plaintiff was to pay) was about $100,000 more than the $300,000 written in “the document” (presumably, the heads of agreement); and
b. a reasonable estimate of any contributions towards those costs likely to be received from another party was nil.
Turner Freeman submitted that paragraph 23 of the Statement of Claim pleads a conclusion. No material facts are pleaded to form the basis of the allegation. The advice “about the information recorded in the settlement authority” is not particularised, so the defendants have no notice of what it is alleged to have been. The facts relied upon in support of the allegation that the costs were $100,000 more than the $300,000 in the settlement authority are not disclosed. Neither has the plaintiff pleaded or particularise to whom it is alleged that the costs referred to in the Statement of Claim were payable or whether the costs have, in fact, been paid.
Paragraph 24 of the Statement of Claim alleges a breach in reliance upon the matters alleged in paragraph 23. Turner Freeman submitted that paragraph 24 should also be struck out.
Paragraph 26 of the Statement of Claim describes two opportunities allegedly lost by Mr Byrne “in the premises pleaded in the previous 7 paragraphs”. Turner Freeman submitted that it follows from the deficiencies in paragraph 23 that paragraph 26 should also be struck out.
Paragraph 26 of the Statement of Claim alleges a lost opportunity to settle the 2014 proceedings and a lost opportunity to go to trial. These pleadings are inconsistent and are not pleaded in the alternative, contrary to UCPR r 14.18.
Paragraph 27 of the Statement of Claim says:
Mr Byrne suffered harm by incurring more legal fees, none of which were reduced by any contribution from the Owners Corporation.
Turner Freeman argued that paragraph 27 is vague and embarrassing. It is not clear what is meant by “more legal fees”. No basis is stated for the implied assertion that the Owners’ Corporation ought to have contributed to the payment of those legal fees. The pleading is inconsistent with paragraph 15(3) of the Statement of Claim, which says that the Owners’ Corporation was ordered to pay Mr Byrne’s costs of the 2020 proceedings. Turner Freeman do not understand what is put against them in this paragraph.
I agree with Turner Freeman’s submissions.
Mr Casselden’s submissions and Mr Byrne’s responses
Mr Casselden SC adopted the whole of Turner Freeman’s submissions. In addition, Mr Casselden advanced five further arguments, (A) to (E).
(A) The Plaintiff fails to plead material facts regarding the Owners’ Corporation’s obligations
In relation to the issue of what obligations the Owners’ Corporation is alleged to have breached, Mr Thompson, for Mr Casselden SC, raised a further, fundamental issue, which is that the Statement of Claim does not plead the source or content of the Owners’ Corporation’s alleged obligations. It was submitted that Mr Byrne cannot plead a cause of action, relying upon a breach of obligations, without also pleading the source and the content of those obligations. This submission overlaps with Turner Freeman’s first submission, to some extent.
In his written submissions, Mr Doyle Gray argued, for Mr Byrne, that the “material facts” regarding the obligations of the Owners’ Corporation which are alleged to have been breached are “irrelevant” and referred to the judgment in Byrne v Strata Plan [2021] NSWSC 342 (Byrne v Strata Plan).
Byrne v Strata Plan is an extempore decision of Sackar J, which Mr Thomson provided to the Court. Sackar J says, at [2] and [4]:
2. … a claim was made in the District Court in 2016. Evidence was filed in those proceedings. As a result of discussions between the parties a settlement was arrived at and a deed was entered into between the respective parties on 10 September 2018. That deed, importantly, had a provision, cl 3, which involved numerous promises to be fulfilled by the Owners Corporation.
…
4. The dispute before the Court today and yesterday involves or did involve a question of whether the defendant had properly fulfilled those promises it made in the deed. As a result of comments made by me yesterday and the good sense of counsel, much has now been resolved in the case and I will be invited shortly to make certain orders by consent, which will have the effect of the Court ordering specific enforcement of certain provisions of the deed. …
It would appear that the 2020 proceedings settled. There is no reference in Sackar J’s remarks to the Heads of Agreement.
The Statement of Claim, paragraph 7, alleges that the first and second defendants had a duty of care “to advise Mr Byrne about his rights should the defendant in the 2014 Proceedings (the Owners Corporation) fail to perform its obligations in sufficient time to keep the hearing date of the trial, before Mr Byrne signed the document”. The document referred to is the Heads of Agreement. Paragraph 12 of the Statement of Claim alleges “The Owners’ Corporation failed to perform its obligations in sufficient time to keep the hearing date and proceed to trial”. This is the crux of the plaintiff’s negligence claim. It is fundamental to the claim that there were in existence obligations to which the Owners’ Corporation was subject and which the Owners’ Corporation subsequently breached, causing Mr Byrne loss. The source and content of those obligations is not pleaded in the Statement of Claim.
Far from being irrelevant, the source of the asserted obligations and the content of those obligations are critical to the Advice Claim. The defendants cannot properly understand or engage with the claim in their absence.
(B) It would be an abuse of process for the Plaintiff to replead to allege that the Heads of Agreement was binding
It was further submitted that it would be an abuse of process to permit Mr Byrne to replead in order to allege that the Heads of Agreement created obligations binding upon the Owners’ Corporation, because the evidence filed by Mr Byrne (Mr Hernandez’s affidavit) records his solicitor’s confirmation, in correspondence, that the Heads of Agreement was not a final settlement agreement:
(a) The Plaintiff’s current solicitors wrote on 13 September 2024 : “It is our view that the Heads of Agreement dated 31 May 2018 was a settlement in principle, whereas the attached Deed of Settlement [dated 10 September 2018] formalised the settlement.” (see annexure G to Mr Hernandez’s affidavit)
(b) The Plaintiff’s former solicitors wrote to the Solicitors [ie Turner Freeman] on 13 May 2021 alleging that, as at the final directions hearing in the 2014 Proceedings (well after the signing of the Heads of Agreement), “settlement between the parties had not been reached” and “the mediation session had not achieved finality”. (see annexure F to Mr Hernandez’s affidavit)
Cacace v Bayside Operations Pty Ltd [2006] NSWSC 572 at [18] was cited as authority for the proposition that a settlement in principle demonstrates a state of consensus somewhat short of “settled”. It conveys an intention by the parties “not to make a concluded bargain at all, unless and until they execute a formal contract.” Mr Byrne and the Owners’ Corporation executed a formal contract on 10 September 2018 when they executed the Deed of Settlement.
Mr Byrne, through his solicitors, in the letter of 13 September 2024, conceded that the Heads of Agreement did not impose legally binding obligations upon the Owners’ Corporation.
Annexure F to Mr Hernandez’s affidavit is a letter dated 13 May 2021 from PBL Law group on behalf of Mr Byrne to Turner Freeman Lawyers. In it, the author, Mr Khan, says on p 3:
8. District Court: After signing the DOS [Deed of Settlement and Release] on the date of 10 September 2018 the District Court made consent orders to the following effect:
- Matter settled subject to the parties’ compliance with a deed;
- Proceedings dismissed under notice given 14 February 2019;
- Liberty to file documents within 28 days to substitute the order made today; and
- The parties failed to finalise the proceedings.
I agree with the submissions made on behalf of Mr Casselden SC with respect to submission (B).
(C) The allegation that the Heads of Agreement “settled the Proceedings” is an abuse of process
Mr Thomson argued that it was clear from the orders set out in Mr Byrne’s solicitor’s own letter that the matter was settled upon the parties entering into the Deed of Settlement on 10 September 2018, and not upon signing the Heads of Agreement on 31 May 2018, contrary to the allegation in paragraph 5 of the Statement of Claim that the Heads of Agreement and Settlement Authority “settled the 2014 Proceedings”. In these circumstances, the allegation in paragraph 5 is an abuse of process. I note that the similar assertion that the Heads of Agreement contained “terms of settlement” is made in paragraph 8 of the Statement of Claim.
Further, Mr Thomson argued that, in circumstances where the plaintiff’s own evidence shows that the 2014 proceedings were settled on the basis of the Deed of Settlement and not the Heads of Agreement, this Court should strike out the Statement of Claim to prevent an abuse of its process. Remington v Scoles [1897] 2 Ch 1 at 7 was relied upon as authority for the proposition that the Court has an inherent power to prevent an abuse of process by striking out a pleading:
having regard to the character of [the pleading], bearing in mind what is known about the case beforehand and what is known about the previous proceedings in the case.
I agree with Mr Thomson. It is apparent from the correspondence attached to Mr Hernandez’s affidavit, which was filed by the Plaintiff, that the Statement of Claim gives an account of the events upon which it relies in a way which is so incomplete as to be misleading. The existence of the Deed of Settlement is not referred to in the Statement of Claim. The Statement of Claim does not set out the dates of hearing for which the 2014 proceedings were set down in the District Court, the date upon which the trial dates were vacated, the circumstances of the vacation of the trial dates or the date on which the matter was finalised in the District Court. The time line, which is critical to the issue of causation, is not set out. The Statement of Claim refers to a claim which is only partly set out and which is inadequately and misleadingly described.
(D) The claim based on the Heads of Agreement discloses no triable issue
Mr Thomson argued that the Advice claim does not disclose a triable issue so that the proceedings should be dismissed under UCPR rule 13.4. Given its nature and terms, the date of the District Court orders in the 2014 proceedings and clause 12 of the Deed of Settlement, the Heads of Agreement imposed no contractual obligations upon the Owners’ Corporation, did not release the Plaintiff’s claims against the Owners Corporation and did not have the effect of depriving the Plaintiff of the right to go to trial and obtain judgment, as alleged in paragraph 10 of the Statement of Claim. There is therefore no reasonable cause of action based on the Heads of Agreement.
I accept Mr Thomson’s argument and agree with his conclusion.
(E) Since no settlement was executed, Legal Profession Uniform Law, s 177, is not engaged
Mr Thomson pointed out that the Legal Profession Uniform Law provides, in s 177:
177 Disclosure obligations regarding settlement of litigious matters
(1) If a law practice negotiates the settlement of a litigious matter on behalf of a client, the law practice must disclose to the client, before the settlement is executed—
(a) a reasonable estimate of the amount of legal costs payable by the client if the matter is settled (including any legal costs of another party that the client is to pay); and
(b) a reasonable estimate of any contributions towards those costs likely to be received from another party.
(2) A law practice retained on behalf of a client by another law practice is not required to make a disclosure to the client under subsection (1), if the other law practice makes the disclosure to the client before the settlement is executed.
It was argued that a consequence of the admission, on behalf of Mr Byrne, that the Heads of Agreement “was a settlement in principle” and that the Deed of Settlement “formalised the settlement” is that Mr Byrne should not be permitted to plead that the Heads of Agreement represented the settlement of the 2014 proceedings. The obligations in s 177 did not, therefore, come to be imposed upon Turner Freeman prior to Mr Byrne signing the Heads of Agreement. The Settlement Authority is not capable of being construed as effecting settlement of the 2014 proceedings.
I agree with these submissions. As a consequence, no reasonable cause of action is disclosed in paragraphs 19 to 28 of the Statement of Claim (the Settlement Authority Claim).
The plaintiff’s further response to the Notices of Motion
The plaintiff criticised the defendants’ Defences and alleged that they failed to comply with s 56 of the Civil Procedure Act 2005, but did not say how.
The plaintiff submitted that the Notices of Motion are an abuse of process because the defendants have filed verifiable defences. The plaintiff said that this principle came from “appellate authority absent from the defendants’ submissions”. There is no principle of universal application that a pleading which has been responded to may not be the subject of an application for dismissal or a strike out application.
Mr Doyle Gray, the plaintiff’s counsel, in his written submissions, was critical of the first defendant’s defence and the affidavit verifying that defence, but this is not responsive to the Notices of Motion, so I will not deal with it, except to refer to the following statement in Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 at [4]:
…it is a misapprehension to think that the only function of particulars is to reveal to a party facts of whose existence he is unaware. As I have indicated, particulars have the important function of informing a party of the nature of the case he has to meet and of limiting the issues of fact to be investigated by the court. (at p 219)
It is not for the defendants to piece together a case for the plaintiff by inference from hints set out in the Statement of Claim.
The plaintiff relied upon a decision of Chief Justice Martin of the Supreme Court of Western Australia in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; 33 WAR 82 at [4] – [12] (“Barclay Mowlem”):
4 It is, I think, important when approaching an issue of that kind [ie consideration of the adequacy of a statement of claim] to bring to mind the contemporary purposes of pleadings. The purposes of pleadings are, I think, well known and include the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.
5 In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly the exchange of written submissions.
6 Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met.
7 In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
8 Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the Court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained.
9 In this case, I have reviewed the statement of claim and the objections to it and I have done so in the case management context to which I have referred. It is my view, that many of the objections which have been taken are pedantic and pettifogging in nature. In many cases, elucidating and resolving the objection would consume an amount of time and resources, which is entirely disproportionate to the benefit to be derived from that process in terms of the identification of the true issues which have to be met in the case.
10 In many cases, consideration and determination of each objection would give rise to precisely the type of time and resource wasting forensic exercise which the Commercial and Managed Cases List was created to discourage. That is not to say that buried within those voluminous objections there might not be a criticism that should be properly be seriously entertained, but having looked myself at the statement of claim, it is my view that any lawyer looking at that pleading, genuinely interested in knowing what issues are to be tried and the case that has to be met, would have no difficulty in ascertaining those matters.
11 There are claims for misleading and deceptive conduct, claims for variations pursuant to the contractual provisions, claims for extension of time and delay damages arising from those variations, there is an acceleration claim and a claim relating to the posting of security for the contract works.
12 None of them are claims of a kind that are unfamiliar to any lawyer regularly practising in the construction area. None of them are exceptional. All of them are capable of clear enunciation and comprehension and appear to give rise to arguable causes of action. It seems to me, that only a lawyer interested in technical advantage, obfuscation and delay could feign ignorance of the substantive issues that emerge from that pleading and the case which has to be met.
The Notices of Motion in this matter argue precisely the pre-conditions referred to by Martin CJ at [7]: the identification of the issues, the disclosure of an arguable cause of action and apprising the defendants of the case that has to be met. There is nothing in Barclay Mowlem which speaks against the bringing of the applications before me. There is nothing “pedantic and pettifogging” about the defendant’s motions or the arguments in support of them.
Conclusion
I bear in mind that the jurisdiction to terminate an action summarily is to be used only in a clear case. I bear in mind the words of Pearlman AJA, with whom Hodgson JA and Ipp JA agreed, in Cosmos E-C Commerce Pty Ltd v Sue Bidwell & Associates [2005] NSWCA 81 at [37]-[38]:
37 The basis for the exercise of a court’s jurisdiction to order summary judgment is not in doubt. In Dey v Victorian Railways Commissioners(1949) 78 CLR 62, Dixon J said, at p 91 that”…a case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury”. In General Steel Industries Inc v Commissioner for Railways (NSW) and Ors(1964) 112 CLR 125 at 129. Barwick CJ stated that the jurisdiction to terminate an action “…is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.” Both those authorities dealt with the exercise of a power of summary dismissal of a plaintiff’s claim, but, in Theseus Exploration NL v Foyster(1972) 126 CLR 507, which dealt, amongst other things, with the giving of summary judgment, Barwick CJ at 514 said:
Perhaps the summary intervention to prevent the continuance of a plaintiff’s action ought to be much rarer than the giving of summary judgment but there is sufficient correspondence in the two situations to make apposite to this case much of what I said in General Steel Industries v Commissioner for Railways (N.S.W.)..
38 Webster and Anor v Lampard(1993) 177 CLR 598 was also a case involving the exercise of a power to give summary judgment. At pp 602-603 in a joint judgment, Mason CJ and Deane and Dawson JJ cited both Dey v Victorian Railways Commissionersand General Steel Industries v Commissioner for Railwaysfor the proposition that the power must be exercised with exceptional caution, and stated that “[n]owhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact.”
For the reasons set out above, this is such a clear case. The allegations of negligence made in the Statement of Claim are incompletely pleaded. The defendants have not been apprised of the case they are to meet. The failure is fundamental. The advice that, it is pleaded, the defendants ought to have given is not specified. The circumstances in which loss was allegedly occasioned to the plaintiff on account of the failure to give the unspecified advice is not particularised, and material facts are not provided.
Turner Freeman has sought particulars and material facts from the plaintiff’s solicitors. They have not been provided.
In addition, the Statement of Claim omits to mention the Deed of Settlement of 10 September 2018 which, it is apparent on its face, superseded the Heads of Agreement of 31 May 2018. The Statement of Claim also omits other critical dates, set out above at [75]. The Statement of Claim, read as a whole, on account of the missing information, is misleading to the extent of being an abuse of process.
The following orders will issue:
(1)Pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 14.28, the Statement of Claim filed on 31 May 2024 (Statement of Claim) is struck out.
(2)Pursuant to UCPR r 13.4(1)(b) these proceedings are dismissed.
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