Byrne v Waimond Pty Limited

[1990] HCATrans 65

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl8 of 1990

B e t w e e n -

EDWARD JOHN BYRNE

Applicant

and

WAIMOND PTY LIMITED and

CHARLIE BAINQUAN WONG

Respondents

Application for special

leave to appeal

BRENNAN J
DEANE J

Byrne

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 APRIL 1990, AT 4.16 PM

Copyright in the High Court of Australia

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MR D.E. GRIEVE, QC:  May it please Your Honours, I appear with

my learned friend, MR J.V. NICHOLAS, for the

applicant. (instructed by Minter Ellison)

MR J.A. McCARTHY, QC:  May it please Your Honours, I appear with

my learned friend, MR R. BRENDER, for the respondents.

(instructed by F.C.Bryant & Co)

BRENNAN J: Yes, Mr Grieve.

MR GRIEVE:  Your Honours, we have taken the somewhat unusual

course of reducing to writing an outline of the

argument that we propose to put to the Court. If

it is of assistance to Your Honours, may we pand it

up in triplicate, with copies for our friends.

The case involves the extent of a solicitor's

liability for the tort of negligence to a party who,
on the applicant's contention, was not at the
relevant time a client of the solicitor. Now, the

majority in the Court of Appeal evidently took the

view - we say "evidently" advisedly, since the

presiding judge, Mr Justice Kirby, expressly took the

view that the respondents to this application were,

at the time, clients of the applicant. Mr Justice Hope

was not quite so clear cut about it. When one reads

His Honour's judgment it would appear that he shared

that view. The primary judge made no finding on the

question of whether or not, at the relevant time, the

respondents were clients of the applicant. Indeed,

at leave book page 18 point 8 or line 25, the

primary judge expressed himself thus:

I do not, therefore, need to consider

Mr. Grieve's argument that the Defendant
did not at any stage act for either Waimond

or Wong.

He then left the question open. Mr Justice Kirby

in the Court of Appeal, at page 26 of His Honour's

erroneously said: judgment, at leave book 51, line 16, with respect,	As found by his Honour and unchallenged
before us, a solicitor-client relationship
persisted.

We have this to submit on that issue: first, no such

finding was made by the primary judge; and secondly,

had it be·.en made, it most assuredly would have been

the subject of a challenge. The question as to whether

such a relationship existed or not is not, as our
friends may argue, in our submission, a pure and

simple question of fact. Indeed, we submit that the

facts of this case, by no means unusual, are apt to

point up the question as one of law or as one of

principle very appropriately.

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Byrne

The facts of this case can be reduced to

essentials in a very short sunnnary. A and B

entered into joint venture to develop Black Acre.

A was the registered proprietor of Black Acre at

all material times. A engaged the solicitor to act

on behalf of the joint venture in relation to the
subdivision of Black Acre and to do all things that

solicitors usually do in that regard.

It may be accepted that there was an expectation

that if and when buyers were found for those pieces

of Black Acre that resulted from the subdivision the

solicitor would be retained anew or afresh to act in

relation to each sale of those respective lots. In

this case that- - -

BRENNAN J:  Can I just interrupt you to say that there is a

finding in an expression of facts by the trial judge

on page 7. Is what you are saying now your

construction of what His Honour found or said there,

that is at line 5?

MR GRIEVE:  No, no. We are not debating - we are not putting

that issue into challenge. We are accepting for the

purposes of this application - and indeed there may

be no basis upon which we could do otherwise whether here or on the hearirg of the full appeal - that at one

stage, at an early stage, the solicitor was in a

solicitor/client relationship with the respondents to

this application.

BRENNAN J:  The question may also be whether they were in a

solicitor/client relationship with them in relation

to the Oatley land transactions, whatever that means.

MR GRIEVE: If the primary judge's use of that expression was

intended to be construed to mean that the solicitor
had accepted-a general retainer to look after the
interests of the joint venturers, and each of them
severally, throughout the life of the venture in

relation to all aspects of the venture, then we would

most assuredly challenge that finding or that

construction of His Honour's remarks for several

reasons. First -

BRENNAN J:  I can understand that, but is this not the problem

that we have here a number of expressions of fact - they may amount to findings - of the trial judge on

the one hand and they each of the members of the to discuss the nature of a solicitor's duty of care

owed to X without a clear understanding of whether

Xis a client, and if so what are the terms of the

retainer, seems to me at first blush to be an

impossibility.

MR GRIEVE:  I take the force of Your Honour's point. May we

respond to it shortly by putting these submissions.

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First, true it is that all four of the judges of

the supreme court expressed themselves on this

particular point in differing ways. Secondly, however,

the evidence, however viewed, adduced before the

primary judge exposes what actually happened to be not

the subject of any material dispute and what follows

from that, thirdly, in our respectful submission, is

that once those facts, those undisputed facts, can be

simply and readily distilled, as we submit they can,

there is then exposed a discrete question as to

whether as a matter of legal principle it would be

correct to describe the respondents to this application

as clients of the applicant/solicitor at the time of the mortgage transaction in favour of the financier.

The facts, if one can put them in the negative,

were that at that time - that is the time of the

mortgage - there were no instructions given by either

the respondents to this application or their

co-venturer, Grady Paris Pty Limited, which were in the

hands of the solicitor and which had not been fulfilled.

In other words, there had been no work required by

the venturers of the solicitor which he still had not

attended to. The subdivision was, at that time,

complete. He had carried that out. The title was in

a subdivided state. He had nothing to do in the way

of discharge of a retainer.

True it was there may have been some expectation

that if and when a buyer for the land in Hollaran Park

were found he may have been engaged afresh to handle

that particular transaction. But we submit that no

such expectation would be sufficient to cloak him

with the responsibilities that flow from a solicitor

and client relationship.

BRENNAN J:  What is the explanation then of the letter that he

wrote to the.council about some alternative method

of developing the land?

MR GRIEVE:  As I understand it - and I will have my junior

check it - that letter - the first observation that

we have to put by way of submission about that is

that letter was written back in May of 1971, some

two years or so before the mortgage transaction.

My friend questions that and I will just check it.

I am sorry, I was misinformed, Your Honours. In

fairness, my junior took that from the primary

judge's judgment. If I have misinformed the Court,

then I do apologize, but I certainly do apologize

for having misinformed the Court as to the date.

The letter was written on 31 May 1973. It was, as

I apprehend it, it involved a representation to the

council which was rejected and at that point nothing

further could be done on that aspect of the matter.

At all events, even if it is incorrect to characterize

the events as we have endeavoured so to do, and even

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Byrne

if it correct to say that at the time of the mortgage transaction there was some residual activity required of the solicitor, pursuant to his retainer to complete

the subdivision, we would submit that that would not
give rise to a general duty of care out of the retainer

to look after the financial and other interests of

the joint venturers. The retainer itself would only

go so far as its express or implied terms obliged the

solicitor to act or refrain from acting.

The question which, in our submission, arises,

being one of general or public importance, is where

does one draw the line that marks the boundary of a

solicitor's liability to parties who are not, at the

relevant time, his clients? We submit the line was

finely drawn in HAWKINS. We have extracted in

paragraph 2 of our short outline a passage in

Your Honour Mr Justice Deane's judgment and we have

submitted that two of the elements ordinarily required

to found a claim for damages in negligence where the

loss is a pure economic one do not arise here. There

was no known reliance or dependence on any statement

made by the applicant/solicitor or anything else that

he did and there was no assumption of any responsibility

on his part such as in HAWKINS, the retention of a will.

Thus, in our submission, for the decision of

the Court of Appeal to stand the respondents to this

application have to identify some element or element

other than those two identified by Mr Justice Deane

in the passage in question as corning within His Honour's

qualification "commonly but not necessarily". And in

our submission that, well, no doubt casts upon them
an onerous burden, but if they are able to discharge

it they will define the line with what we submit to

be desirable precision, or at least they will assist

the Court in having the Court define the line with

desirable precision.

BRENNAN J: There is :onlyone judge below, as I read it, who accepts

the hypothesis	on which your submission is based,
namely, Justice Mahoney, who says that there was no

solicitor/client relationship.

MR GRIEVE:  In our submission, the primary judge proceeded on

that footing as well.

BRENNAN J: That depends a little on how one construes whatever

he said at page 7.

MR GRIEVE: Perhaps.

BRENNAN J: In other words, in the one case where the proposition

of fact is accepted, then the conclusion is in

accordance, I take it, with your submissions. That

is Justice Mahoney's conclusions.

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MR GRIEVE:  Yes.

BRENNAN J: In the case of the other three judges, the hypothesis

of facts upon which you base your submissions is

either not expressly found or by implication is

rejected.

MR GRIEVE:	Yes, we accept that, with respect.
BRENNAN J:	So that to make good your proposition, do you not

have to first challenge either the absence of a finding or the implied finding in each of thsoe

cases?

MR GRIEVE:	Yes, we do.
BRENNAN J:	Now, does that not mean that before we get to your

point we have to concern ourselves with the facts

of the case?

MR GRIEVE:  No doubt. And those facts, in our submission, are

in comparatively short compass and at the end of the

day were not the subject of any material or

significant dispute. So that one can set those facts

out shortly, concisely and without, in our submission,

any attendant controversy.

What one draws from the facts as so capable of expression is a question of law which, in our

submission, is one of general importance, namely if

it is correct to say that at the time of the

transaction there was no relevant contract of retainer,

then can it be said, notwithstanding that, that the

respondents to this application were in law clients

of the applicant. Alternatively, and the next
question which necessarily arises, if the answer to
that question is in the negative, that is as a matter

of law they were not clients and no relationship of

solicitor and client existed, then the question which

consequentially arises in our submission is is there

any special status to be attached to a former client?

BRENNAN J: I do not wish to bring you back to this, but as I

read what Mr Justice Kirby says at page 37 his judgment

is founded on the hypothesis that there is a continuing

client relationship between the solicitor and Waimond

and Mr Wong, that is page 37, lines 21 to 26.

MR GRIEVE:  Yes.

BRENNAN J: And if you look at the other member of the majority in the Court of Appeal, that is Mr Justice Hope, one finds perhaps not the same clarity of expression ot

finding there except that His Honour does say at the

end of his judgment, apparently by way of rejecting

the argument, page 76 line 16:

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It has been submitted for Byrne that it

was no part of his retainer that he look

after the financial interests of Waimond

and indeed that his retainer as regards

Waimond wa s limted to what might be called

the conveyancing aspects -

et cetera. Now, it is only by inference in the case

of Mr Justice Hope, perhaps, whereas it is expressly
in the case of Mr Justice Kirby, although in the case

of Mr Justice Hope one looks at the analogy that he

drew between an instructing solicitor or a solicitor

accepting instructions from a trustee- - -

MR GRIEVE:  We accept that it is implicit in Mr Justice Hope's

judgment, that he took the view - - -

BRENNAN J: Both of those judgments, both of the majority

judgm:mts approached this on a factual hypothesis that

is radically different from the argument which you

seek - from the basis on which you seek to raise

this argument.

MR GRIEVE:  Yes, and we submit, with respect, that the factual

footing for that finding was wholly insupportable

in the evidence and that once one exposes the error

that underlies that factual footing, the reasoning
that is built on to it must fall and the factual task,

the -

McHUGH J: It is not the reasoning that is built on to it that

falls, is it, so much? All this case involves is a

question of fact, that you say that the majority of

the Court of Appeal got a question of fact wrong

and that question of fact formed the foundation of

their judgment. Their Honours did not say that
there ... 9 been a realtionship of proximity if there

was no solicitor/client relationship. On your

argument they wrongly assumed that there was.

MR GRIEVE:  We would put it slightly differently, with respect.

We would say that that was not an error of fact, that was an error law, that what the majority in the

Court of Appeal concluded from a certain set of

undisputed facts was that there was at that time, as

a matter of law, the relationship of solicitor and

client as between the parties with the consequence

that in law the applicant/solicitor was liable to

the respondents to this application.

McHUGH J:	But how can you say that when you have already
pointed out that Mr Justice Kirby thought he was following Mr Justice Campbell on the question of
fact.

MR GRIEVE: Well, with respect to His Honour, there is an

internal inconsistency in the judgment in the sense

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that at the page that the presiding Judge,
Justice Brennan, referred to a little earlier

His Honour Mr Justice Kirby expressly rejected,

page 37 of the leave book, line 20 and following,

our argument that whatever may have once been the

position, that is notwithstanding that there may have

been in the past a relationship of solicitor and

client, that was at the relevant time purely

historical, ie,not one.Later on at page 51 of the

leave book His Honour says in the short passage that

we quoted in our outline:

As found by his Honour and unchallenged

before us -

Now, those two passages, with respect to the president,

simply cannot stand together. There was a real

forensic contest on that issue and notwithstanding
that, the president at least appears to have proceeded
on the footing that that point was conceded. Well, it

was a red hot issue, both at first instance and

throughout the hearing of the appeal before the

Court of Appeal.

Your Honours, those are the submissions that

we would put.

BRENNAN J:  We need not trouble you, Mr McCarthy.

Having regard to the findings as they were

expressed in the several judgments in the courts

below we are not of the opinion that this is a

suitable vehicle to agitate the question of law

which the applicant seeks to raise as a special

leave point in this case.

Accordingly, special leave is refused.

MR McCARTHY:	I make an application for costs.
BRENNAN J: With costs.

AT 4.40 PM THE MATTER WAS ADJOURNED SINE DIE

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