Background
Background to the litigation
At the commencement of the hearing, counsel for the applicants, Mr White, sought leave to discontinue the proceeding on behalf of Mr Borick. There was no opposition in respect of this order, save in regard to the question of costs. Consequently, I made the order, and the application proceeded on the basis of the draft revised statement of claim which is exhibited to FDN14 at FMBT2. To avoid any confusion, I will refer to the applicants by their names. Where I refer to them jointly, I will call them “the applicants”.The facts as relied on by the applicants leading up to their claim Mr Hegarty says that, on 4 December 2004, he visited the respondent at Port Augusta Prison, and discussed with him “the matter”.[2] He says that he discussed his terms of engagement with the respondent, and gave him a copy of his standard terms of engagement. He asked the respondent to read them, and then return the acknowledgment slip to him. The respondent did not return the acknowledgment slip, or the terms of engagement themselves. Mr Hegarty no longer has a copy of the document that he gave to the respondent. [2] FDN 12 at [4]. Mr Hegarty says that during the interview, he acknowledged to the respondent that he was aware that the respondent could not pay his fees at the time that the work was done, and was prepared to await the finalisation of the matter, and to receive payment from any compensation paid to the respondent. Mr Hegarty says:Mr Keogh appeared to accept this and agreed for me to act on his behalf. There was no suggestion that I was to act ‘pro bono’ or without fee.[3][3] FDN 12 at [8]. He says that the respondent instructed him to retain Mr Borick as counsel. The retainer was:…to do whatever was needed to be done in order to achieve his release from prison and hopefully a payment of compensation to him.[4][4] FDN 12 at [10]. After the respondent received the payment from the government, Mr Hegarty sought payment of his fees. The respondent refused to make any payment to him. The essence of Mr Hegarty’s claim is that the contract between him and the respondent was that he would retain Mr Borick as counsel and between them they would undertake the work required to secure the respondent’s release from prison, and a payment of compensation. The respondent would not be required to pay their fees as they accrued; in the event of success, that is, the respondent’s release from prison and receipt of compensation, their fees would become payable.The evidence relied on by Mr Hegarty The evidence relied on by Mr Hegarty is contained in FDN 12 (the contents of which formed the basis for the summary set out at [4] – [8] hereof) and FDN 14, an affidavit of Mr Hegarty’s solicitor. It appears that Mr Borick relies on the same evidence. Exhibited to FDN 12 as MSH1 is a copy of Mr Hegarty’s standard terms of engagement (“standard terms”) which he used in December 2004. He says of this document:It contains similar provision to that provided to Mr Keogh.[5][5] FDN 12 at [7].
Evidence
Evidence Before The Court
The essence of Mr Hegarty’s claim is that the contract between him and the respondent was that he would retain Mr Borick as counsel and between them they would undertake the work required to secure the respondent’s release from prison, and a payment of compensation. The respondent would not be required to pay their fees as they accrued; in the event of success, that is, the respondent’s release from prison and receipt of compensation, their fees would become payable.The evidence relied on by Mr Hegarty The evidence relied on by Mr Hegarty is contained in FDN 12 (the contents of which formed the basis for the summary set out at [4] – [8] hereof) and FDN 14, an affidavit of Mr Hegarty’s solicitor. It appears that Mr Borick relies on the same evidence. Exhibited to FDN 12 as MSH1 is a copy of Mr Hegarty’s standard terms of engagement (“standard terms”) which he used in December 2004. He says of this document:It contains similar provision to that provided to Mr Keogh.[5][5] FDN 12 at [7]. The standard terms have a number of notable features. They relate specifically to a family law dispute. They require payment by the client of disbursements as they become payable; a disbursement will not be incurred (in respect of report fees) until sufficient funds have been placed in Mr Hegarty’s trust account. An itemised invoice will be provided to the client on a monthly basis, requiring payment within fourteen days. Late payment of accounts will result in work ceasing on the file. The client must pay $1,000 into Mr Hegarty’s trust account before he will commence work. It is impossible to predict the likely total cost of the matter. The next document exhibited to FDN 12, as MSH2, is a schedule “setting out the areas of work that [Mr Hegarty] was involved in over the period of [his] retainer”.[6] Like the standard terms, there are a number of notable features to the schedule. Firstly, there are very few mentions of Mr Hegarty. Thus, it is impossible to determine exactly how Mr Hegarty was “involved in” the events set out. Secondly, it is apparent that a large number of lawyers, both solicitors and counsel, assisted the respondent from time to time, both with and without the Mr Hegarty and Mr Borick.[7] Thus, the degree of “involvement” of either of them is impossible to determine from the schedule. Thirdly, many items report that certain actions were carried out by the respondent himself. While I accept that this is unlikely to have been the case, the schedule throws no light on whom carried out these actions.[6] FDN 12 at [11].[7] See, for example, items 31, 35, 38, 40, and 52 of MSH2. MSH3 is a copy of a letter from Mr Hegarty to the respondent dated 10 April 2012. This letter canvasses the actions currently being taken on behalf of the respondent by Mr Hegarty and others, and discusses the prospect of compensation and the options open to the respondent. It contains the following:When I first met you at Port Augusta goal I made it clear to you that I would not be acting on a pro-bono basis and that I would act for you on the basis I would be paid if you eventually obtained compensation. I provided you with a draft agreement to that effect which I have always understood you accepted. On that basis I proceeded, and continue to act for you albeit you did not return the signed agreement to me. I also made it clear to you that Kevin Borick would continue to act for you on the same basis. To date you have never given any indication that you were anything other than appreciative of the work undertaken on your behalf in respect of the various investigations undertaken, the work on the 3rd and 4th Petitions and the actions against Manock and James.
Decision
Reasons for decision
In the recent decision of Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd & Ors[19] (Adelaide Brighton Cement), Doyle J considered the operation of Rules 70.3, 143.1, 143.2, and 144.2. He said the following:[19] [2020] SASC 161.Chapter 12 of the Uniform Civil Rules is entitled Early finalisation, and deals in Parts 3 and 4 with summary dismissal and summary judgment. In respect of the former, UCR 143 provides for summary dismissal on two grounds, namely on the ground that no reasonable cause of action (or defence) is capable of being disclosed, or on the ground that the action (or defence) is frivolous, vexatious or an abuse of process. …Summary judgment: general principlesFocussing upon the situation where, as here, a respondent seeks summary judgment on the applicants claim, under UCR 144.2(2)(a) the respondent must establish that there is no reasonable basis for prosecuting the claim. This may be contrasted with the test under SCR 232 of the 2006 Rules (no reasonable basis for the claim), and the test under s 31A of the Federal Court of Australia Act 1976 (Cth) (no reasonable prospect of successfully prosecuting the proceeding).I do not think that there is any material difference between the test under UCR 144.2(2)(a) and the test that applied under SCR 232. The focus remains upon the existence of a reasonable basis for the claim, and the addition of the words for prosecuting does not add anything (other than, perhaps, to achieve some symmetry with the reference to for defending which appeared in SCR 232(2)(a), and remains in UCR 144.2(1)).Assuming equivalence between these tests, I note that there has been some discussion in the authorities by way of comparison between the test under SCR 232 and the test under its predecessor in the 1987 Rules. While it has been accepted that SCR 232 was intended to “lower the bar”, there has been some disagreement as to the extent to which this is so. In Ceneavenue Pty Ltd v Martin, Debelle J (with whom Duggan and Anderson JJ agreed) accepted that there had been a lowering of the bar, but also suggested that it did not involve any “material difference” or “substantial relaxation” in the approach to be taken to summary judgment. Subsequently, in Davies v Minister for Urban Development and Planning, Bleby J doubted whether the Full Court in Ceneavenue Pty Ltd v Martin had given proper effect to the words used in SCR 232. But perhaps more significantly, his Honour also expressed the view that the Full Court’s decision had in any event been overtaken by the decision of the High Court in Spencer v Commonwealth.The decision of the High Court in Spencer v Commonwealth was a decision in relation to s 31A of the Federal Court of Australia Act. Although there is some basis for thinking that the intended scope of this section may be broader than SCR 232 and UCR 144.2, the focus of the High Court’s analysis was upon the words “reasonable prospect of success”. In my view, there is no material difference between this test, and the test under UCR 144.2. Both require a focus upon whether the claim has a “reasonable” basis or prospect. It is accurate to observe that, at least from a linguistic standpoint, “reasonable basis” is directed to the present, whereas “reasonable prospect” is directed to the future. However, as Kourakis CJ explained in Collins v Djunaedi, it is doubtful whether any difference between the two will ever lead to different results. It is difficult to see how there could be a reasonable prospect of future success in prosecuting a claim unless there is a presently existing reasonable basis upon which to prosecute it. And it is difficult to conceive of a claim which has a reasonable basis but which does not have a reasonable prospect of success. It seems to me that both tests require consideration of the existing basis for the claim, whilst at the same time allowing for the possibility that further or different evidence may emerge during the prosecution of the claim, or be presented during any trial of the claim.For these reasons, I agree with the observation by Bleby J in Davies v Minister for Urban Development and Planning to the effect that any need for debate about the extent of the lowering of the bar under the South Australian rules has been overtaken by the decision in Spencer v Commonwealth. While aspects of the reasoning in cases such as Ceneavenue Pty Ltd v Martin remain of assistance, they should be seen through the prism of the High Court’s reasons in Spencer v Commonwealth.By way of summary of the approach articulated in Spencer v Commonwealth, it can be said that the power to determine a claim summarily should not be exercised lightly. Exercise of the power requires a practical assessment of whether the applicant has real, as opposed to merely fanciful, prospects of success. While the Court need not be satisfied that the claim is hopeless or bound to fail, nevertheless it must be cautious not to do a party injustice by summarily determining an action, particularly where there are disputed issues of fact or law or mixed fact and law, merely because the Court considers that the claim is unlikely to succeed. However, beyond these very general guidelines, the Court should focus upon the words used in the rules and avoid applying any judicial gloss.Related to the requirement that the Court undertake a “practical” assessment is the notion that the Court should not embark upon a ‘mini trial’ of the claim. Rather, the claim should be assessed in a summary manner, while being cognisant of the incomplete nature of the evidence upon which the Court’s decision must be based. Adversarial argument may assist, and indeed may result in the emergence of a sufficiently clear answer to a complex issue that summary judgment is appropriate. On the other hand, the need for prolonged argument may be indicative of a reasonable basis for the claim.Summary dismissal and striking out: general principlesThe grounds upon which the Court may strike out a pleading under UCR 70.3, or summarily dismiss an action under UCR 143 are expressed in similar terms. The grounds for each encompass both (a) a claim, pleading or action that is frivolous, vexatious or an abuse of process and (b) the failure or inability to disclose a reasonable cause of action.The courts have generally eschewed any attempt to define frivolous and vexatious. While the concepts overlap to some extent, and are sometimes treated as a single compendious concept, the former invites a focus upon whether the claim or issue is worthy of serious attention, whereas the latter invites a focus upon whether the claim or issue is being pursued for the purposes of harassing or vexing the other party. Abuse of process is a broad concept. It may take a number of different forms, but is usually associated with some improper or collateral purpose. Relevantly in the present context, it will be informed by the overarching obligations of the parties and their lawyers under UCR 3.1, and extend to the pursuit of a claim which does not have a proper basis in light of that rule. The claim might lack a proper basis because it is based upon an assertion for which there is no basis in the material available to the party, which misstates the material upon which it is based, or which extends beyond any assertion for which that material might provide a basis.As to this last matter, I refer to my earlier articulation (at [26]-[28] above) of the distinction between a pleaded case which is based upon a general inference with a proper foundation, and a pleaded case that involves impermissible fishing or trawling for a case. The latter may be seen as either a species of abuse of process, or the absence of a reasonable basis for the pleaded case.It has been suggested that abuse of process in this context may include the pursuit of a pleading that does not disclose a reasonable cause of action. However, I consider it unnecessary to dwell on whether abuse of process extends this far given that the failure or inability to disclose a reasonable cause of action is itself a basis for striking out a pleading or summarily dismissing an action.While the criteria for the exercise of the Court’s power to strike out and summarily dismiss are expressed in similar terms, the difference between the two mechanisms for challenging an applicant’s claim lies in the nature and focus of the challenge. The power to strike out under UCR 70.3 is directed to the applicant’s “Claim or pleading” (with the former defined as the document by which an action is commenced), whereas the power to dismiss is directed to the applicant’s “action” (which is defined to mean a claim in the sense of a proceeding in which the applicant claims a remedy for a cause of action). The focus of the former is thus upon the articulation of the applicant’s case in the relevant document, usually a pleading. And the focus of the latter is upon the applicant’s case itself.The difference in focus between the two has implications for the use that may be made of evidence in the determination of the applications. In the case of a strike out application, the Court’s consideration of the nature and adequacy of the claim, as disclosed in the pleading itself, may require recourse to a document or documents referred to in the pleading (such as a contract) in order to make sense of the pleading. It may also require consideration of some evidence so as to enable the Court to understand the pleaded allegations in their proper context, and hence expose their inadequacy or their frivolous, vexatious or abusive character. However, it will not ordinarily require any consideration of evidence going to the underlying merits of the applicant’s claim, let alone making findings on that evidence.In the case of a dismissal application, on the other hand, there will often be greater scope for reliance upon evidence so as to make good the proposition that the applicant’s case itself is deficient in some respect, or is otherwise frivolous, vexatious or an abuse of process. That said, the nature of the exercise will nevertheless differ from that which is undertaken on a summary judgment application. While the difference is difficult to articulate, an application for summary dismissal is typically addressed more to the absence of any identifiable proper claim, whereas an application for summary judgment is typically addressed more to a particular defect in, or answer to, an otherwise properly articulated and disclosed case.The difference between strike out and dismissal applications also relates to, and explains, the difference in the consequences to which they lead. The former leads to an order that the relevant pleading (or part thereof) be struck out. However, as the conclusion justifying this order is one based upon a deficiency in the pleading, and not necessarily the case itself, the applicant is usually given an opportunity to replead. The latter, on the other hand, because it is predicated upon a defect in the applicant’s case (rather than merely the pleaded articulation of it), leads to an order that the action or proceeding itself be dismissed. Whilst such an order brings the relevant action or proceeding to an end, it does not ordinarily give rise to res judicata or otherwise prevent a fresh claim being brought in appropriate circumstances.While I have attempted to summarise what I see as the key features of, and differences between, summary judgment, summary dismissal and strike out applications, I accept that in practice the distinctions are often difficult to draw and observe, and there is, quite appropriately, scope for overlap and flexibility in their operation.(citations omitted)
Ratio Decidendi
Legal Principle Established
In respect of the claim for a quantum meruit, Mr White submits that there is no dispute that there was a retainer and that work was performed pursuant to it. The dispute is as to its terms, not its existence, or whether it was fulfilled or not. Having taken the benefit of those legal services, it would be unjust to deny Mr Hegarty and Mr Borick of any remuneration for the work they have done. Consideration The respondent seeks, alternatively, strike out of the applicants’ statement of claim, pursuant to Rule 34.1 of the UCR on the basis that it is frivolous, vexatious or an abuse of process of the Court, or pursuant to Rule 70.3, on the basis that it is frivolous, vexatious or an abuse of the process of the Court, or does not disclose a reasonable cause of action, or judgment for failure to disclose the basis for his action pursuant to Rules 143.1 and 143.2, or summary judgment on the basis there is no reasonable basis for prosecuting the claim and the cause of action, pursuant to Rule 144.2. These rules provide:34.1—Strike out of filed documents(1)The Court may order that a filed document or part of a filed document be struck out if—(a) it does not comply with these Rules; or(b) it is frivolous, vexatious or an abuse of the process of the Court.(2)If the Court strikes out all or part of a document under subrule (1), it may if it thinks fit grant leave to file within a specified time an amended or substituted document rectifying the matter that caused the original document to be struck out.70.3—Strike out(1) The Court may strike out all or part of a Claim or pleading if—(a) it does not comply with these Rules;(b) it is frivolous, vexatious or an abuse of the process of the Court; or(c) it does not disclose a reasonable cause of action or defence (as applicable).(2)If the Court strikes out all or part of a document under subrule (1), it may if it thinks fit grant leave to file within a specified time an amended or substituted document rectifying the matter that caused the original document to be struck out.143.1—Judgment for failure to disclose basis(1)The Court may grant judgment dismissing an action on the ground that no reasonable cause of action in the case of a claim, or basis for the application in the case of an originating application, is capable of being disclosed.(2)The Court may grant judgment in favour of an applicant in an action on the ground that no reasonable defence in the case of a claim, or basis to contest the application in the case of an originating application, is capable of being disclosed.143.2—Judgment for abuse of process(1)The Court may grant judgment dismissing an action on the ground that it is frivolous, vexatious or an abuse of the process of the Court.(2)The Court may grant judgment in favour of an applicant in an action on the ground that a defence of or contest to it is frivolous, vexatious or an abuse of the process of the Court.144.2—Summary judgment (1)The Court may, on application by a party, give summary judgment in favour of an applicant—(a) on a claim if there is no reasonable basis for defending the claim;(b) on a cause of action in a claim if there is no reasonable basis for defending the cause of action; or(c) on a separate issue that arises in a claim if there is no reasonable basis for contesting that issue.(2)The Court may, on application by a party, give summary judgment against an applicant—(a) on a claim if there is no reasonable basis for prosecuting the claim;(b) on a cause of action in a claim if there is no reasonable basis for prosecuting the cause of action; or(c) on a separate issue that arises in a claim if there is no reasonable basis for contesting that issue.(3)An application for summary judgment must be made by filing an interlocutory application and supporting affidavit in accordance with rule 102.1.