Dirkis v Public Trustee and Guardian & Ors (Appeal)
[2023] ACAT 49
•4 September 2023
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
DIRKIS v PUBLIC TRUSTEE AND GUARDIAN & ORS (Appeal) [2023] ACAT 49
AA 37/2021 (XD 32/2021)
Catchwords: APPEAL – civil dispute – application in negligence brought by beneficiary of a will against the administrator of the estate and its legal representatives – appeal against decision to dismiss application as lacking in substance – no error in application of principles – no error in the original tribunal’s finding that a beneficiary does not have a cause of action in negligence against the administrator of an estate not vested – no error found in original tribunal’s finding that the tribunal lacks jurisdiction to grant equitable relief for breach of trust – no error in original tribunal’s finding absence of negligence where all actions taken pursuant to Court orders – appeal dismissed
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 19, 32
Subordinate
Legislation cited: Court Procedures Rules rr 1720, 1734
Cases cited:Carey v Freehills [2013] FCA 954
Carlisle v Filara Pty Ltd [2002] ACTSC 33
David v David [2009] NSWCA 8
Dey v Victorian Railways Commissioners [1949] HCA 1
Dirkis v Public Trustee and Guardian as Trustee of the estate of Kathleen Mary Dirkis [2021] ACAT 57
FCT v Whiting [1943] HCA 45
Gonzales v Claridades [2003] NSWCA 227
Hill v van Erp [1997] HCA 9
Jamieson Mary v Australian Workers Union [1999] VCAT 628
The Public Trustee and Guardian v Dirkis [2021] ACTSC 29
The State Electricity Commission Board v Rabel [1998] 1 VR 102
List of
Texts/Papers cited: Pearce, Administrative Appeals Tribunal (4th Edition, LexisNexis, 2015)
Tribunal:Temporary President G McCarthy
Date of Orders: 4 September 2023
Date of Reasons for Decision: 4 September 2023
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 37/2021
BETWEEN:
PAUL DIRKIS
Appellant
AND:
PUBLIC TRUSTEE AND GUARDIAN AS TRUSTEE OF THE ESTATE OF KATHLEEN MARY DIRKIS
First Respondent
AND:
ACT GOVERNMENT SOLICITOR
Second Respondent
AND:
PETER GARRISSON
Third Respondent
APPEAL TRIBUNAL: Temporary President G McCarthy
DATE:4 September 2023
ORDER
The Tribunal orders that:
The application for appeal is dismissed.
………………………………..
Temporary President G McCarthy
REASONS FOR DECISION
This appeal arises from the appellant’s claim in the original proceeding that the first respondent, the second respondent who acted for the first respondent and the third respondent who had overarching responsibility for the legal work done by the second respondent were negligent in the manner in which they performed their functions.
A statement of the factual background to the appellant’s claim in the original proceeding is necessary in order to understand the grounds of appeal.
Background
The appellant’s mother died in 2009. By her will, she appointed the appellant and his brother, Michael Dirkis, as executors of her estate. The beneficiaries are the appellant and his three siblings. The executors were granted probate of the will on 4 October 2011 in Supreme Court proceeding PRO 513 of 2011 (subsequently re-identified as P 513 of 2011).
On 3 March 2017, the appellant’s sister commenced proceeding SC 58 of 2017 in the Supreme Court seeking orders for the removal and replacement of her brothers (the appellant and Michael Dirkis) as executors.
On 9 August 2017, in proceeding P 513 of 2011, the Court made the following orders:
(a) By consent, Paul Vytis Dirkis and Michael James [Dirkis] be removed as the executors of the estate of the late Kathleen Mary Dirkis;
(b) By consent, the Public Trustee and Guardian for the Australian Capital Territory be appointed as the administrator of the estate of the late Kathleen Mary Dirkis;
(c) The cost of the Plaintiff, First Defendant and the Second Defendant be paid out of the estate on an indemnity basis; and
(d) The Amended Application in Proceeding dated 27 July 2017 be dismissed with no order as to costs.
On 9 August 2017, in proceeding SC 58 of 2017, the Court made the following orders:
(a) By consent, Paul Vytis Dirkis and Michael James Dirkis be removed as the executors of the estate of the late Kathleen Mary Dirkis;
(b) By consent, the Public Trustee and Guardian for the Australian Capital Territory be appointed as the administrator of the estate of the late Kathleen Mary Dirkis;
(c) The costs of the Plaintiff, First Defendant and the Second Defendant be paid out of the estate on an indemnity basis.
As at 16 February 2021, the first respondent, in its capacity as executor of the appellant’s mother’s estate, had paid $111,235.99 out of the estate for the legal costs incurred by the appellant’s brother and sister in the above-mentioned Court proceedings, $30,624.90 of which was payment of Michael Dirkis’ costs.[1]
[1] Dirkis v Public Trustee and Guardian as trustee of the estate of Kathleen Mary Dirkis [2021] ACAT 57 at [24]
The appellant took issue with the payment of Michael Dirkis’ costs contending –
…the PTG was negligent in failing to undertake its own assessment of whether Michael’s costs were properly and reasonably incurred and in failing to require the cost to be assessed under Division 2.17.5 of the Court Procedures Rules 2016. [The appellant] claims to have suffered loss as a result – namely, a diminution in the value of his quarter share of the estate – and claims damages caused by the Public Trustee and Guardian’s negligence in the amount of $6,500.[2]
[2] [2021] ACAT 57 at [24]
The appellant also claimed $10,000 damages arising from the conduct of the third respondent in permitting payment of Michael Dirkis’ costs from the estate without requiring the claimed costs to be assessed.[3] How these damages were allegedly incurred was unclear.
[3] [2021] ACAT 57 at [3]
With reliance on the Court order that the parties’ costs be paid out of the estate on an indemnity basis, the appellant submitted a claim for $107,000 to the first respondent for the payment of his own costs.[4] The first respondent requested information from the appellant as to how these costs were incurred. The first respondent was unable to assess from the information provided whether the costs were reasonably incurred. As a result, no agreement was reached regarding costs payable to the appellant. Pursuant to rule 1720 of the Court Procedures Rules, absent an agreement as to costs, a party “is not entitled to recover costs unless they are assessed costs”.[5]
[4] Letter from the appellant dated 22 October 2020, Exhibit R1, tab 23
[5] The Public Trustee and Guardian v Dirkis [2021] ACTSC 29 at [13]
In order to address the impasse, the first respondent applied to the Supreme Court for an order that the appellant file a bill of costs so that his costs could be assessed. The appellant continued to resist the proposition that he needed to file a bill of costs and opposed the application. First, the appellant submitted the first respondent’s application to the Court should be dismissed because it was out of time. Second, he submitted it should be dismissed because, he said, there was a conflict of interest. The Court rejected both arguments and ordered the appellant to file a bill of costs with the Court in each proceeding.[6]
[6] [2021] ACTSC 29
In in its reasons for rejecting the appellant’s second submission, the Court said:
15. Turning now to the conflict suggested by the defendant; as I understood the defendant, the conflict arose because if the plaintiff did not obtain the order it sought, it would be bound to pay the whole of the amount previously claimed by the defendant and would, in turn, be liable to the estate for any excess of the amount paid over what would have been the assessed amount.
16. I cannot see any conflict. The plaintiff is endeavouring to pay the defendant’s costs in the manner ordered by the court. It has not been able to do so because the parties have not reached any agreement as to the quantum of those costs. Accordingly, recalling that the costs must be assessed under r 1720, the plaintiff is endeavouring to achieve that purpose so that it can comply with the costs orders.
17. Absolutely no foundation has been provided for a conclusion that the plaintiff is somehow motivated by an ulterior purpose, namely its anticipation of having to reimburse an amount of money to the estate which it represents.
18. Having rejected the defendant’s arguments, I make the following orders:
(i)Pursuant to r 1803 of the Court Procedures Rules the defendant is to file a bill of costs in respect of his costs in proceedings SC 58 of 2017 and P 513 of 2011 within 30 days of the date of this order.
(ii)Each party to pay their own costs for the application.
The appellant lodged a bill of costs in each proceeding on 25 March 2021 but, as at the date of the original proceeding, an assessment of the bill had not been completed; no agreement had been reached as to the amount of costs that were payable; and the first respondent had not paid anything towards the appellant’s claim.[7]
[7] [2021] ACAT 57 at [25]
In the original proceeding, the appellant claimed the first respondent, acting on the advice of the second respondent, refused to pay his costs without just cause and failed to negotiate his claim for costs in good faith. He contended the second respondent, working under the direction of the third respondent, conspired to cause him economic loss and, in doing so, engaged in misleading or deceptive conduct by suggesting to the appellant that the first respondent wished to reach agreement with the appellant regarding his costs when it had no genuine intention of doing so. The appellant contended this led the first respondent to instruct the second respondent to file his application in the Supreme Court for an order that the appellant file a bill of costs in the two proceedings.
The appellant claimed $3,600 said to be his “suffered loss” as a result of the impugned conduct, quantified it as arising from his “direct costs and the time costs of appearing” in the Supreme Court for a day and his time (seven days) preparing documents.[8] The appellant subsequently limited, or perhaps re‑characterised, his claim (for the same amount) as being for the “cost of preparing and filing a bill of costs.”[9]
[8] [2021] ACAT 57 at [26] and [33]
[9] [2021] ACAT 57 at [26] and [33]
The appellant also alleged that the third respondent’s “negligent advice that no costs are payable to him in respect to [Supreme Court proceeding] PRO 513 of 2011 was causative of the [first respondent’s] decision to seek an order that he file a bill of costs”.[10] In this respect, as I understand it, the appellant was referring to a statement to that effect in a letter to him from the third respondent dated 23 December 2020.[11]
[10] [2021] ACAT 57 at [30]
[11] [2021] ACAT 57 at [27]
In response to the appellant’s application, the respondents filed interim applications for an order that the appellant’s application to the original tribunal for orders against them be summarily dismissed pursuant to section 32 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act) on the grounds that it was frivolous or vexatious, lacking in substance or otherwise an abuse of process.[12]
[12] [2021] ACAT 57 at [4] and [7]
The original tribunal dismissed the appellant’s claims against each of the respondents on the grounds that the claims were “lacking in substance”, pursuant to section 32(1)(b) of the ACAT Act. It published reasons for its decision.[13]
Grounds of appeal
[13] [2021] ACAT 57
The grounds of appeal were loosely worded about which I make no criticism of the appellant who does not have legal training. I note them as follows:
(a)At para 18 he relied on State Electricity Commission Board V Rabel [1998] 1 VR 102. And the VCAT summary in Jamieson Mary v AWU [1999] VCAT 628. At para 19, he drilled down on [6] – [9] while ignoring the additional comments.
(b)The senior member articulated the test as “untenable proposition of law or fact”. He then misapplied this test to law and facts. This misapplication arose out a clear disdain the senior Member had for the Applicant, and his belief that the Applicant should have pleaded his case as if he was expert litigator.
(c)No jurisdiction with respect to the First Respondent. The respondents did not put forward any evidence nor argue or objection to the jurisdiction of the tribunal.
(d)The Senior member, failed to establish the nature of the “loss” being claimed. The senior member made an error of law with respect to the applicant’s entitlement. He Assumed that thar applicant was a mere beneficiary under a will, rather than a beneficiary of a trust with a vested entitlement. The Senior member did not apply the test in High Court in FCT v Whiting on the question of vesting.
(e)No cause of action with respect to the second and third Respondent, and their employee’s and professionally supervised staff, Mr Burn, Mr McCrone and Ms Arthur. be it the tort of Negligence, Conspiracy or abuse of power in a public office.
(f)Senior member at Paris 63 cited the case David V David, as not owing a duty of care. Now that was a case of “non-disclosure” where there was a limited retainer, and the solicitor was representing two clients. That was not the case before the senior member.
(g)With respect to the second and third respondents’ negligence, and other torts, the senior member ignored the absence of advice of the payment of $30,624.90, an only focused on “the advice and instruction process”. I note at Para 58, he asserts that Elkaim J found the order was justified in the circumstances. is patently untrue on reading the extract he relied on. To seek a bill of costs does not require any justification of substance, it is viewed as an administrative process agnostic to the motives of Mr Burn.
(h)He relied to this error of fact so not to address the further legal claims that was suggested by the 1-3 respondent’s barrister. (In fact at the second hearing the respondents barrister suggested that the negligence lay with the 2nd and 3rd Respondents.
(i)The respondents failed to meet the very high threshold laid out for striking out an application in ACAT.[14]
[14] Application for appeal dated 15 July 2021
The appellant sought an order that the orders of the original tribunal be set aside, that “fees of this appeal be awarded” and that the hearing of the substantive matters proceed.
In support of his appeal, the appellant filed written submissions dated 3, 8 and 16 November 2021. I have taken those submissions into account for the purpose of considering the alleged errors in the original tribunal’s decision.
Ground 1 – misapplication of the test for summary dismissal
It is clear the original tribunal was well aware of the principles and comments regarding summary dismissal noted in the decision of the Victorian Civil and Administrative Tribunal (VCAT) in Jamieson Mary v Australian Workers Union (Jamieson Mary)[15]. The original tribunal quoted them in full. In its reasons for decision at [18] – [19], the original tribunal said:
[15] [1999] VCAT 628
18. … The following summary of the principles derived from Rabel by the Victorian Civil and Administrative Tribunal in Jamieson Mary v Australian Workers Union [1999] VCAT 628 has been adopted and applied consistently in the ACAT. The references to “s75” are to the Victorian equivalent of section 32 of the ACAT Act.
A short summary of the principles from Rabel’s case as applicable to … s75 … proceedings is as follows:
(1)… s75 permits an order to be made at any time including on the Tribunal’s own initiative. The procedure to be adopted is in the Tribunal’s discretion. The proceeding may be determined on the pleadings and submissions alone, or by allowing the parties to put forward further material, including affidavits and oral evidence.
(2)If in a proceeding a complainant indicates to the Tribunal that the whole of their case is contained in the material put before the Tribunal, the Tribunal is entitled to determine the matter by asking whether, on all the material before it, there is a question of real substance to go to a full hearing.
(3)However, if a complainant indicates that there is other evidence they can call to support their claim and the Tribunal does not permit that evidence to be called, the Tribunal cannot determine the matter on the basis that the complainant’s material contains the whole of their case.
(4)A proceeding to dismiss or strike out a complaint is similar to an application to the Supreme Court in civil proceedings for summary dismissal. Both are designed to prevent abuses of process. However, it is a serious matter for the Tribunal, in an interlocutory proceeding which will generally not involve the hearing of oral evidence, to deprive a litigant of the chance to have their complaint heard in the ordinary course.
(5)In an application, the respondent bears the onus of showing that the complainant’s case ought not be allowed to proceed. In a s 75 hearing where the Tribunal proceeds on its own initiative the Tribunal must be satisfied on all the material before it that the complaint should not be allowed to proceed.
(6)For a dismissal or strike out to succeed, a respondent must show, or the Tribunal when proceeding on its own initiative must be satisfied, that the complainant’s case is obviously hopeless and untenable or that it could on no reasonable view justify relief. The Tribunal’s power to dismiss or strike out a complaint should however be exercised with caution and consistently with the objectives of the Act.
(7)In dealing with a dismissal or strike out matter a clear distinction must be drawn between the complaint or claim itself and the evidence which is to be given in support of it. A complaint cannot be dismissed or struck out as lacking in substance merely because it does not in itself contain the evidence supporting the claims.
(8)A complaint can be dismissed or struck out if it is obviously unsustainable in law or in fact. This will include, but is not limited to, a case where a complaint can be said to disclose no reasonable cause of action, or where the respondent can show a defence sufficient to warrant the summary termination of the complaint.
(9)The Tribunal should not apply technical, artificial or mechanical rules in coming to a view about the case that a complainant wishes to advance.
Two additional comments should be made. First, if the material before the Tribunal shows that there is a dispute between the parties as to a fact in issue and the material does not assist the Tribunal to resolve the dispute, then it would be difficult for the Tribunal to be satisfied that the complaint is so lacking in substance that it should be dismissed or struck out.
Second, if the respondents have satisfied the Tribunal that the complaint or any part of it is frivolous, vexatious, misconceived or lacking in substance in respect of any element essential for the complainant to prove in order to substantiate the complaint at a full hearing, then the complaint or the relevant part of the complaint should be dismissed or struck out.
19. The observations in (6), (7) and (8) are pertinent here. As Ormiston J observed in Rabel at [14], an application will be lacking in substance if it is based on an “untenable proposition of law or fact”. The determination of that issue does not involve any evaluative judgment about the sufficiency of a party’s evidence or the credit of any witness.
The appellant did not articulate in what way the original tribunal “ignored” the two comments in Jamieson Mary, notwithstanding it stating them. Whatever may underpin ground 1, I am not satisfied the original tribunal ignored the comments. It is clear from the original tribunal’s reasons for dismissing the appellant’s application as lacking in substance that none of the reasoning involved a disputed fact that could not be resolved on the material that was before the original tribunal. The application was dismissed because the claims in negligence were untenable based on the facts that were not in dispute or, where there might have been a dispute, with an assumption that the facts were as the appellant contended – for example, that some or all of Michael Dirkis’ claimed legal costs were not payable.
The original tribunal’s decision to dismiss the appellant’s application arose from its finding that the appellant’s application was based on untenable propositions of law. The finding did not involve any evaluative judgement about the sufficiency of evidence or the credit of any witness.[16] In other words, the original tribunal heeded, rather than “ignored”, the comments in Jamieson Mary about when summary dismissal cannot occur.
[16] [2021] ACAT 57 at [19]
I see no error in the original tribunal’s understanding of the principles to be applied when deciding whether summary dismissal under section 32 of the ACAT Act may be ordered. Nor do I see any error in its application of those principles or the comments in Jamieson Mary about when summary dismissal cannot or can occur. Ground 1 fails.
Ground 2 – pleading as an expert litigator
At the appeal hearing, the appellant began with a submission that the Senior Member erred by not recusing himself because of a perception of bias.[17] This allegation, I assume, underpinned the appellant’s claim in ground 2 that the Senior Member misapplied the law to the facts consequent upon the “clear disdain” the Senior Member allegedly had for the appellant.
[17] Transcript of proceedings, 19 November 2021, page 2, lines 43-45
At hearing, I pointed out that on appeal I was concerned with an error of fact or law that affected the outcome. I said, “assume for the minute that there was actual or apprehended bias f… how would that have led to a different outcome.”[18] I drew to the appellant’s attention that his application to the original tribunal dismissed consequent solely on the original tribunal’s findings that the claims were not legally tenable. At this point, the appellant “abandoned” appeal ground 2 insofar as it concerned bias.[19]
[18] Transcript of proceedings, 19 November 2021, page 3, lines 35-36
[19] Transcript of proceedings, 19 November 2021, page 4, lines 43-46
The second component of ground 2 regarding him not being an “expert litigator” was not developed in the appellant’s written or oral submissions. Nevertheless, I do not accept the original tribunal summarily dismissed the appellant’s claim because it was not expertly pleaded. Indeed, to the contrary, the reasons for decision demonstrate that the original tribunal engaged with the substance of the appellant’s claim and disentangled it so as to show that when the facts, or facts assumed in the appellant’s favour, were referenced to the applicable legal principles, each of the appellant’s claims was legally untenable. I deal with this further in my consideration of the other grounds of appeal. Ground 2 fails.
Ground 3 – lack of jurisdiction
The starting point in a consideration of jurisdiction, or lack of it, is that the Tribunal is a subordinate body established under statute, namely the ACAT Act. It has no power to consider a claim or make an order that it is not authorised under statute to consider or make. Objection to jurisdiction might be raised by a party, or the Tribunal of its own initiative might raise a concern, but it does not have (or obtain) jurisdiction simply because no objection is taken (as the appellant contended) or where parties agree to the Tribunal hearing and determining a matter. The Tribunal must be satisfied that it has jurisdiction to consider a claim regardless of what might be put, or not, by the parties.[20]
[20] Pearce, Administrative Appeals Tribunal (4th Edition, LexisNexis, 2015) at [3.6]
Moving to the ground of appeal, to contend the original tribunal erred by finding it lacked jurisdiction to determine the appellant’s claim (despite no objection from the respondents) confuses what occurred.
In the original proceeding, the appellant brought a claim in negligence against the first respondent for paying Michael Dirkis’ legal costs pursuant to the Court order made on 9 August 2017.
The original tribunal summarily dismissed the claim because, on the facts and the law, the appellant did not have a cause of action in negligence against the first respondent.
The original tribunal did not say it cannot hear and determine a claim in negligence: plainly it can, pursuant to section 19 of the ACAT Act. It summarily dismissed the appellant’s claim because, on analysis, the facts did not give rise to a claim in negligence. Rather, they gave rise to an equitable claim, namely a chose in action,[21] which the Tribunal does not have jurisdiction to hear or determine. At hearing, the appellant agreed the Tribunal does not have an equitable jurisdiction.[22]
[21] [2021] ACAT 57 at [50] – [51]
[22] Transcript of proceedings, 19 November 2021 page 7, lines 15-17
In the original proceeding, the appellant brought also claims against the respondents alleging negligence, malfeasance in public office and conspiracy to cause loss, among other claims arising from their unwillingness to pay his claimed costs of $107,000 and the first respondent applying to the Supreme Court for an order that he file a bill of costs.
The original tribunal did not dismiss those claims because it lacked jurisdiction to hear and determine them. It did so because, on the facts, the claims were legally untenable for the reasons given. Ground 3 fails.
Ground 4 – a vested entitlement
The appellant submitted the original tribunal did not apply, or incorrectly applied, the “test” in FCT v Whiting.[23] The appellant said that in FCT v Whiting, the High Court found that “the beneficiaries of a deceased estate cannot be presently entitled to the income of the estate until it has been fully administered. This requires that all funeral and testamentary expenses, debts, annuities and legacies have been paid or provided for in order that the amount of the residue can be determined.”[24]
[23] [1943] HCA 45
[24] Application for appeal dated 15 July 2021
The appellant initially contended, notwithstanding the High Court’s statements in FCT v Whiting to the contrary, that “a present entitlement may arise prior to the administration of the estate being finalised provided that adequate amounts have been set aside for these items and it is apparent part of the income of the estate will remain available for distribution.”[25]
[25] Application for appeal dated 15 July 2021
In his later written submissions dated 3 November 2021, the appellant took a different approach, contending the estate had been fully administered as at 9 August 2017, and “certainly fully administered by April 2019 when the invoices were paid.” On this basis, he said, his present entitlement as a beneficiary of a vested trust existed. He contended that all that was left was for the trustee to make distributions [to] each beneficiary having a 25% interest”.[26]
[26] Appellant's written submissions dated 3 November 2021 at [41] – [44]. The appellant repeated these submissions in his written submissions dated 8 November 2021 at [41] – [44]
Referring to the appellant’s first approach, I reject the proposition that a present entitlement may arise prior to the administration of the estate being finalised if adequate amounts have been set aside to pay all debts and other testamentary expenses. The appellant did not cite any authority for that proposition, which is contrary to the statement of Mason P in Gonzales v Claridades quoted by the original tribunal[27] and by the appellant in his written submissions,[28] where his Honour said:
Since the estate is currently unadministered the appellant has no present right, in law or equity, to the property which comprises.[29]
[27] [2021] ACAT 57 at [46]
[28] Appellant's written submissions dated 3 November 2021 at [41]
[29] Gonzales v Claridades [2003] NSWCA 227 at [19]
Referring to the appellant’s second approach, his submission that the estate was “fully administered” as at 9 August 2017 or “certainly” by April 2019 is contrary to the fact. I need only refer to the appellant’s claim that his legal costs be paid by the estate as a debt owing to him; that no amount had been paid towards his claimed costs; and that an assessment of his bill of costs had not been completed.[30] Ground 4 fails.
Ground 5 – cause of action against second and third respondents, their employees and staff
[30] [2021] ACAT 57 at [25]
The appellant made submissions about the statutory and fiduciary duties of care that, he said, the first and second respondents and their employees including their legal officers owed him in the actions they took and the decisions they made that affected his interests as a beneficiary of his mother’s estate. He submitted the original tribunal’s characterisation of his claim as an equitable cause of action did not extinguish his common law causes of action arising from the respondents’ alleged breaches of their statutory and fiduciary duties of care to him.
With reference to the actions and decisions of the lawyers engaged to administer the estate, the appellant took issue with the original tribunal’s reliance on the NSW Court of Appeal’s decision in David v David[31] as authority for the proposition that a lawyer acting on behalf of their client does not owe a duty of care to a person who is not their client. In this respect, the appellant referred to and relied on the Federal Court’s decision in Carey v Freehills[32] in which the Court noted the circumstances in which a solicitor has a duty of care to a person who is not their client.
[31] [2009] NSWCA 8 at [92]
[32] [2013] FCA 954
I accept that in Carey v Freehills the Federal Court noted circumstances in which a solicitor has a duty of care to a person who is not their client but nothing in that case is inconsistent with the comments of the original tribunal. The Court began with the statement “Generally speaking, solicitors do not owe a duty of care to persons who are not their clients”.[33] So did the original tribunal.[34] The Court noted that a duty of care can arise “in the context of negligent misstatement causing loss”.[35] So did the original tribunal.[36]
[33] [2013] FCA 954 at [310]
[34] [2021] ACAT 57 at [63]
[35] [2013] FCA 954 at [312]
[36] [2021] ACAT 57 at [62]
In issue before the original tribunal was the appellant’s claim that the second and third respondents owed him a duty of care when providing advice to the first respondent and in communications with him, specifically the letter from the third respondent dated 23 December 2020. Having reviewed the principles in Carey v Freehills, I am not persuaded that anything written by the original tribunal was wrong. Carey v Freehills does not support the proposition that a solicitor is giving advice whenever they are engaged communications with a third party. The Federal Court confirmed the proposition “that, generally speaking, where the alleged duty of care owed by a solicitor to a non-client conflicts with a duty of care towards the client, a duty of care to the non-client is unlikely to be established.”[37]
[37] [2013] FCA 954 at [317]
The appellant also referred to the High Court’s decision in Hill v van Erp[38] in which, he said, the Court found that a solicitor owes a duty of care to a beneficiary of an estate.
[38] [1997] HCA 9
Hill v van Erp concerned a solicitor’s preparation of a will for his client and his client’s wish to include in the will a testamentary gift to her neighbour. The bequest to the neighbour failed because the neighbour was the spouse of a person who witnessed the execution of the will. The neighbour sued the solicitor for negligence in his preparation of the will. The question was whether the solicitor was liable in damages to the intended but disappointed beneficiary. The Court found the solicitor liable because of the particular relationship of proximity with the intended beneficiary and between the parties. The Court added:
There is nothing in what I have said which is intended to convey the view that whenever a person's performance of a contractual obligation may, if performed negligently, injure a third party's economic interests, that person owes the third party a duty of care. Nor is anything I have said intended to convey the view that, other than in a case of the present kind, a solicitor owes a duty of care to persons other than his client whose interests may be affected by the solicitor's performance of his or her duties to the client. The duty of care which I would recognise in the present case arises from the particular relationship between the parties, that relationship being analogous to other relationships of proximity in which a duty of care has been held to arise. It is that which, in addition to the foreseeability of harm, provides the basis in this case for the recognition of tortious liability for negligence.[39] (emphasis added)
[39] Hill v van Erp [1997] HCA 9 per Dawson J
The facts in Hill v van Erp are wholly different from the facts in this case. The comments of the High Court I have emphasised are applicable in this case. I see no error in the original tribunal finding none of the respondents owed the appellant a duty of care.
Even if the appellant were to establish the third respondent owed him a duty of care, when stating to the appellant in his letter dated 23 December 2020 that the appellant had no entitlement to the costs of the application in PRO 513 of 2011, no loss flowed from that statement because two weeks later, on 7 January 2021, the third respondent confirmed that the first respondent “is prepared to pay your legal costs as ordered by the Court in proceedings no SC 58 of 217 and PRO 513 of 2011”. In other words, nothing of consequence flowed from the earlier different statement.
Last, the appellant’s claims against the second and third respondents arose from their advising the first respondent to apply for an order that the appellant file a bill of costs in proceedings SC 58 of 217 and PRO 513 of 2011, which he contended was negligent advice and caused him loss namely the cost of preparing and filing the bill. The original tribunal dismissed the appellant’s claim for two reasons.
First, the Supreme Court found that the order was “justified in all the circumstances”,[40] meaning that even if the second and third respondents owed the appellant a duty of care about the need to seek a bill of costs the duty was not breached because the Court agreed the order was necessary.
[40] [2021] ACAT 57 at [58]
Second, as the original tribunal explained,[41] the appellant has not suffered a loss by having to comply with the Court Order because his costs of preparing the bill and attending to the assessment of costs form part of the costs that the estate must pay to him on an indemnity basis pursuant to the order of McWilliam AJ, meaning that even if the second and third respondents owed the appellant a duty of care about the need to seek a bill of costs, no consequence follows even if there were a breach of the duty because no loss resulted.
[41] [2021] ACAT 57 at [59]
It becomes clear that the original tribunal’s comments about the lack of a duty of care was provided only “for completeness” and had no substantive bearing upon its decision to dismiss the claim against the second and third respondents. Ground 5 fails.
Ground 6 – the absence of advice regarding payment of Michael Dirkis’ legal fees
Ground 6 arose from the first respondent’s payment from the estate of Michael Dirkis’ legal costs totalling $30,624. The first respondent paid those costs pursuant to the Court order that the parties’ costs be paid out of the estate on an indemnity basis.[42] The appellant contended, on appeal, that the costs were not properly paid and that Mr Burn, an employee of the first respondent, was negligent in his failure to review his brother’s claim and to recognise that his brother’s legal costs were not properly payable. This, the appellant said, was “the cornerstone of my claim”.[43]
[42] [2021] ACAT 57 at [23]
[43] Transcript of proceedings, 19 November 2021, page 34, line 34
The appellant alleged that by reason of Mr Burn’s failure to review his brother’s legal costs, and him authorising the payment when it should not have been authorised, the costs were paid when they should not have been with the result that the appellant suffered “a diminution in my 1/4 share of the estate totalling $6500”.[44]
[44] [2021] ACAT 57 at [2]
The appellant alleged the original tribunal erred by not addressing the issue “of Mr Burn being personally liable in negligence”[45] consequent on Mr Burn’s alleged failure to review his brother’s legal costs.
[45] Transcript of proceedings, 19 November 2021, page 37, line 42
The appellant’s argument had many difficulties, the first of which was that the appellant did not bring a claim against Mr Burn, personally. I reject the proposition that the original tribunal erred by not considering whether Mr Burn was personally liable to the appellant when a claim against Mr Burn personally was never made.
Even if such a claim had been made, it would not have succeeded because there is nothing to suggest Mr Burn acted otherwise than in his capacity as an employee of the first respondent or that the first respondent was not accepting responsibility for Mr Burn’s actions. In other words, to the extent there was any negligence on Mr Burn’s part, the first respondent was accepting responsibility for it, meaning everything turned on the appellant’s claim against the first respondent.
In this respect, for all practical purposes ground 6 repeated the substance of ground 5. In other words, I repeat that I see no error in the original tribunal dismissing the appellant’s claim in negligence against the first respondent arising from the acts or omissions of any employee of the first respondent (whether Mr Burn or anyone else) for the reasons it gave.[46]
[46] [2021] ACAT 57 at [36] – [52]
The appellant also alleged the payment of his brother’s legal costs should not have been made because the payment was contrary to the third respondent’s letter dated 23 December 2020 stating that costs were not payable in relation to proceeding PRO 513 of 2011. I will assume, for the purpose of the submission, that Michael Dirkis’ legal costs (or some of them) were incurred in that proceeding.
That the payment might have been contrary to the letter dated 23 December 2020 does not mean the payment should not have been made. Determinative of whether the cost should have been made is the Supreme Court order, per Elkaim J, that they be paid. In particular, the Court ordered that all parties’ costs in both proceedings be paid from the estate on an indemnity basis.
In other words, Michael Dirkis’ costs were properly payable pursuant to the Court order, irrespective of what was stated the third respondent’s letter dated 23 December 2020. In any event, as mentioned above, in his letter dated 7 January 2021, the third respondent acknowledged that costs in relation to proceeding PRO 513 of 2011 were payable, meaning the statement in his earlier letter was no longer applicable.
As a separate matter, the appellant submitted in ground 6 that the original tribunal’s “assertion”[47] that Elkaim J found the order was justified is “patently untrue”. The appellant submitted that the seek a bill of costs does not require any “justification of substance”.
[47] [2021] ACAT 57 at [58]
The appellant’s submission misunderstands (at best) what occurred. Ordinarily, a party seeking payment of its costs will (absent agreement on costs), voluntarily file a bill of costs in order for their costs to be paid. In this case, the appellant refused to file a bill which prompted the first respondent to apply for an order that he do so. The Court ordered him to do so. The Court’s reasons for making the order are consistent with the original tribunal’s conclusion at [58] that the order was justified – such is implicit by the Court making the order. True, assessing costs by reference to a bill of costs is an administrative process, but the appellant’s refusal to file a bill (in order to commence that administrative process) entirely justified the first respondent seeking the Court order, evidenced by the Court making the order. Ground 6 fails.
Ground 7 – the barrister’s claims
The appellant did not elaborate on ground 7 at hearing or in his written submissions. Nor did he identify the “error of fact” alleged in the ground. Nor did he take me to any part of the transcript evidencing “further legal claims” from the respondents’ barrister that negligence lay with the second and third respondents.
It is not for the appeal tribunal to try and ascertain the alleged error of fact or search the transcript for what might constitute the alleged further legal claims. I also find it inherently unlikely that the respondents’ barrister who appeared for “each of the named respondents”[48] would suggest negligence against two of his three clients. Where the ground of appeal is not established by the appellant, it should be dismissed at this point. It would be wrong for me to speculate on the facts and circumstances underpinning the ground of appeal. Ground 7 fails.
Ground 8 – the threshold for summary dismissal
[48] Transcript of original proceedings, 14 May 2021, page 2, lines 12-13
Whilst ground 8 was not developed at hearing, I see no error in the original tribunal dismissing the appellant’s claims against the respondents on the grounds that the claims were “lacking in substance” pursuant to section 32(1)(b) of the ACAT Act. For all practical purposes, ground 7 repeated ground 1 that fails for the reasons given.
Whilst I can accept the appellant’s original application raised questions of seeming legal complexity, that complexity did not preclude the application being dismissed as lacking in substance. Questions of law may be determined on an application for a matter to be struck out as lacking in substance.[49] That argument, even of an extensive kind, may be necessary to demonstrate that a legal proposition is untenable is not a bar to an application being struck out as lacking in substance.[50] Ground 8 fails.
Conclusion
[49] Carlisle v Filara Pty Ltd [2002] ACTSC 33
[50] Dey v Victorian Railways Commissioners [1949] HCA 1
For these reasons, the appeal will be dismissed.
………………………………..
Temporary President G McCarthy
| Date(s) of hearing | 19 November 2021 |
| Applicant: | In person |
| Respondents: | Mr J Pappas, ACT Government Solicitor |
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