Hind v Ronsel Investments Pty Ltd (No 3)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

PROFESSIONAL LIABILITY LIST

S ECI 2019 02152

GREGORY ROY HIND	Plaintiff
v
RONSEL INVESTMENTS PTY LTD	Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	19 April 2021
DATE OF JUDGMENT:	1 July 2021
CASE MAY BE CITED AS:	Hind v Ronsel Investments Pty Ltd (No 3)
MEDIUM NEUTRAL CITATION:	[2021] VSC 385

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PRACTICE AND PROCEDURE – Application to file further amended statement of claim – Where plaintiff is self-represented – Whether pleading discloses plaintiff’s cause of action with sufficient precision – Leave not granted - Whether proceeding should be dismissed for want of prosecution – Russell v Murrindindi Shire Council (No 3) [2021] VSC 116, referred to – Austin v Dwyer [2018] VSC 770, referred to – Cappelleri v Cappelleri [2020] VSC 306, referred to – Finding that proceeding should not be dismissed – Application refused.

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APPEARANCES:	Counsel	Solicitors
The Plaintiff in person
For the Defendant	Mr J Tesarsch	Carter Newell

HER HONOUR:

Introduction and background

These reasons concern an application by the plaintiff, Mr Gregory Hind, to file and serve a further amended statement of claim. The factual background to this proceeding, which commenced in May 2019, is canvassed in some detail in reasons delivered in July 2020 concerning the defendant’s summary judgment application (‘first reasons’) [1], and elaborated upon further in my reasons accompanying my refusal to grant leave to Mr Hind to file a proposed further amended statement of claim (‘second reasons’) [2]. Following the publication of the second reasons, Mr Hind filed a further proposed further amended statement of claim on 2 March 2021, and, after receipt of some correspondence from the defendant’s solicitors, a further version on or about 11 April 2021 (‘proposed pleading’). Mr Hind seeks leave to file and serve the proposed pleading, or, alternatively, in the event that leave is not granted, a further opportunity to replead his case. Apart for a brief period in late 2020 when he received pro-bono assistance, Mr Hind has represented himself in this proceeding.
[1][2020] VSC 428.
[2][2021] VSC 42.

The defendant, Ronsel Investments Pty Ltd (trading as Ronald Segal & Associates) (‘law firm’), opposes Mr Hind being granted leave to file and serve the proposed pleading, on the grounds that the proposed pleading fails to rectify the deficiencies in the previous versions of the statement of claim. Further, the law firm submitted that it is suffering ongoing prejudice by reason of Mr Hind’s failure to put forward his claim against the law firm in an acceptable manner. It is incurring substantial costs as a result of repeated attendances at Court, and the need to consider and comment upon numerous versions of the statement of claim. The events which form the background to this proceeding took place around fifteen years ago. And further, the existence of the proceeding has a continuing deleterious effect upon the professional reputation of Mr Segal, the principal of the law firm.

The proceeding concerns a claim for professional negligence against the law firm with respect to its conduct of a proceeding brought by Mr Hind and his mother against another firm of solicitors, Rigby Cooke Lawyers (‘Rigby Cooke proceeding’). In the Rigby Cooke proceeding, the plaintiffs claimed that Rigby Cooke had provided negligent advice with respect to the financing of a multi-unit residential development project on land owned by the family in Preston commenced in 2006. Mr Hind says that by reason of the law firm’s negligent conduct of the Rigby Cooke proceeding, Mr Hind and his mother (‘plaintiffs’)[3] were forced to settle the Rigby Cooke proceeding for a sum far less than their claims in that proceeding were worth. The inability of the plaintiffs to recover a fair value from the Rigby Cooke proceeding had further adverse financial consequences, as Mr Hind was unable to pay a debt to the Australian Taxation Office (‘ATO’) (and subsequently went bankrupt), and Mr Hind’s mother was forced to sell the family home.
[3]Mr Hind and his mother were partners in the development project, and were both plaintiffs in the Rigby Cooke proceeding. Mrs Hind discontinued her claims in this proceeding in early 2020.

The debt to the ATO was the subject of a proceeding brought by the ATO against Mr Hind in 2010 and 2011 (‘County Court proceeding’). On 23 July 2020, I granted the law firm summary judgment with respect to Mr Hind’s claims against it regarding its allegedly negligent conduct of the County Court proceeding, on the grounds that Mr Hind had no real prospects of success of resisting the law firm’s defence based upon the Limitation of Actions Act 1958 (Vic). I did, however, provide Mr Hind with an opportunity to bring forward his claims against the law firm with respect to its conduct of the Rigby Cooke proceeding.

A more detailed procedural history of the proceeding follows. The chronology of events is relevant to the question of whether, if the proposed pleading is not satisfactory, Mr Hind should have another opportunity to formulate his claim.

Chronology of events

On 15 May 2019, Mr Hind commenced this proceeding by filing a writ and statement of claim. The only allegations against the law firm in the statement of claim concerned the County Court proceeding.

On 5 August 2019, Mr Hind filed an amended statement of claim, which made some cosmetic amendments to the original statement of claim, but substantially repeated the allegations contained in the statement of claim.

On 12 September 2019, the then defendants (‘defendants’) filed a defence, which stated that the first defendant (‘Ronsel Trust’) was not a legal entity capable of being sued, objected to substantial parts of the statement of claim on the basis that they were embarrassing, ambiguous or vague, and, under cover of those objections, denied the allegations made in the statement of claim that the defendants held themselves out as experts in tax law or that they breached the duty owed to Mr Hind to exercise reasonable care, skill and diligence in relation to the County Court proceeding.

On 3 October 2019, Clayton JR made orders on the papers setting the proceeding down for trial on 29 September 2020.

On 2 December 2019, Mr Hind filed better and further particulars to the amended statement of claim, and sought the consent of the defendants to the filing and service of a further amended statement of claim, which included claims against the defendants with respect to the law firm’s conduct of the Rigby Cooke proceeding. The defendants did not consent to the filing and service of that document, based, at least in the first instance, on their view that Mr Hind, by reason of his bankruptcy, did not have standing to bring any claims against them.

On 28 January 2020, Mr Hind unsuccessfully attempted to file a writ and statement of claim in respect of his allegations that the defendants failed to prosecute the Rigby Cooke proceeding with due care and skill. Mr Hind subsequently unsuccessfully attempted to file a draft amended version of this document on 19 February 2020.

On 24 February 2020, the defendants made an application by summons for summary judgment, or alternatively, to strike out the amended statement of claim, on the grounds that Mr Hind had no standing to sue by reason of his bankruptcy, that Mr Hind’s claims were time-barred by the Limitation of Actions Act 1958 (Vic), and that the allegations in the amended statement of claim were confusing, vague and scandalous.

On 6 April 2020, Mr Hind obtained an assignment of his choses in action against the defendants from the trustee of his bankrupt estate. The deed of assignment made it clear that the choses in action assigned to Mr Hind included any claims Mr Hind may have against the defendants arising out of their conduct of the Rigby Cooke proceeding, as well as the County Court proceeding.

The defendants’ application was heard on 9 April 2020, and further written submissions were filed by the parties on 20 and 24 April 2020. During the hearing of the defendants’ application for summary judgment, the defendants requested that the trial date of 29 September 2020 be vacated. On 3 July 2020, I made orders vacating the trial date.

On 23 July 2020, I delivered the first reasons, upholding the defendants’ summary judgment application. However, I refrained from entering judgment in favour of the law firm, on the basis that the proceeding would be kept on foot in order for Mr Hind to formulate his claims against the law firm with respect to its conduct of the Rigby Cooke proceeding (the relevant limitation period having expired on 20 March 2020 prior to the hearing of the summary judgment application, but after Mr Hind had first put his claims forward with respect to the Rigby Cooke proceedings). I also made orders removing Ronsel Trust as a party to the proceeding and setting a timetable to enable Mr Hind to make a further application to amend his statement of claim.

On 6 August 2020, Mr Hind filed a summons making an application that his proposed second amended statement of claim (‘August 2020 version’) be accepted for filing. Following the hearing of the application on 1 October 2020, I delivered a ruling (‘October 2020 ruling’), in which I made the following findings:

(a) I agreed with the law firm’s submissions that the proposed second amended statement of claim failed to give effect to the findings in the first reasons, and failed to adequately plead the facts necessary to establish Mr Hind’s claims in respect of the law firm’s conduct of the Rigby Cooke proceeding;

(b) I agreed that the law firm should have its costs of its summary judgment application with respect to the County Court proceeding;

(c) I granted Mr Hind a further opportunity to filed a further draft amended statement of claim, and provided some guidance to Mr Hind as to what was required to inform the law firm and the Court regarding the case he intends to bring against the law firm with respect to its conduct of the Rigby Cooke proceeding; and

(d) I made orders setting a timetable for the filing and a service of a further draft amended statement of claim, and listed Mr Hind’s application to amend the statement of claim for hearing on 12 November 2020.

Following the hearing on 12 November 2020, when I rejected Mr Hind’s application to file and serve a draft amended statement of claim dated 26 October 2020, I made orders to the following effect:

(a) Mr Hind should have a further opportunity to put forward a proposed further amended statement of claim by 8 December 2020;

(b) the August 2020 version be struck out in its entirety, with no right of reinstatement, but I would continue to refrain from entering judgment in respect of Mr Hind’s claim concerning the County Court proceeding until the pleading was finalised; and

(c) Mr Hind be referred to the Victorian Bar Pro Bono Assistance Scheme (‘Scheme’) for assistance with preparing the proposed further amended statement of claim.

After the hearing on 12 November 2020, Mr Hind informed the Court that Mr Gronow QC had agreed to provide assistance to Mr Hind through the Scheme. On 5 December 2020, Mr Hind wrote to the Court expressing uncertainty as to whether a proposed further amended statement of claim prepared by Mr Gronow QC would be finalised by 8 December 2020. On 7 December 2020, Mr Hind filed an affidavit exhibiting a proposed further amended statement of claim prepared by him. On 14 December 2020, following correspondence between Mr Hind and the Court, Mr Hind provided a copy of a proposed further amended statement of claim prepared by Mr Gronow QC.

Mr Hind’s application was heard on 17 December 2020 and further written submissions were filed by the parties on 13 and 25 January 2021.

In his submissions filed on 13 January 2021, Mr Hind annexed a further proposed amended statement of claim (‘January 2021 version’).

On 17 February 2021, I delivered the second reasons, the thrust of which is set out in paragraph 40 of these reasons, and said that Mr Hind should be given “one last opportunity to get his house in order”. As noted earlier, Mr Hind circulated a further draft pleading on 2 March 2021, and, on 11 April 2021, the proposed pleading.

Accordingly, since the issue of the proceeding, Mr Hind has put forward nine statements of claim, seven of which concerned Mr Hind’s claims against the law firm in relation to its conduct of the Rigby Cooke proceeding.

The further hearing of Mr Hind’s application to file and serve a further amended statement of claim proceeded on 19 April 2021, with the parties’ submissions focussed on the proposed pleading.

Mr Hind’s case

In the second reasons, I summarised what I understood to be the key allegations in Mr Hind’s case against the law firm, as follows:

(a)Mr Hind engaged Rigby Cooke to advise on the development project, in particular, the funding arrangements for the development project. The only asset Mr Hind had was the land itself, such that he needed to borrow most or all of the funds to develop the land. Given that the terms of the finance raised by Mr Hind did not allow for the capitalisation of interest (and Mr Hind had no other sources of funds to meet the interest payments), Mr Hind fell into difficulties, and the lender took control of the development project;
(b)accordingly, Mr Hind instructed the law firm to issue the Rigby Cooke proceeding, asserting that Rigby Cooke’s negligent advice regarding the funding of the development project caused him to suffer loss, in circumstances where Mr Hind expected that he would retain, as the “profit” on the development project, three to four of the twelve units in the development;
(c)Rigby Cooke defended the proceeding, on the basis that, among other things (including a general denial of any liability), Mr Hind was responsible for his own loss, in that he entered into a building contract for the development project in circumstances where the funding obtained did not cover the cost of construction;
(d)accordingly, the issues of causation and contributory negligence were front and centre in the proceeding, not only by reason of Rigby Cooke’s defence, which was filed on 22 February 2011, but because the issue of how Mr Hind put his claim for damages was also raised during the mediation in 2012, and at a directions hearing before Macaulay J in February 2013;
(e)Rigby Cooke’s successful application to join other parties as concurrent wrongdoers should also have alerted the law firm to the need to deal with the issue of who was responsible for Mr Hind’s losses;
(f)the law firm was aware that Mr Hind was dependent upon a favourable outcome in the Rigby Cooke proceeding in order to meet his obligations to the ATO, and that achieving a favourable outcome was dependent upon assembling persuasive evidence to establish that Mr Hind’s losses were caused by Rigby Cooke’s conduct, and to rebut Rigby Cooke’s allegations that those losses were caused by Mr Hind’s own negligence, or by the conduct of others;
(g)no such evidence was assembled in the months leading up to the first scheduled trial date in October 2013, despite the money already paid to the law firm and counsel, or the second scheduled trial date in March 2014, despite the further funds provided between September 2013 and October 2014;
(h)as a result, Mr Hind was in a disadvantaged position vis-à-vis Rigby Cooke leading up to the trial, and was forced to settle on less than advantageous terms by reason of the law firm failing to adequately prepare his case for trial;
(i)as a result, Mr Hind suffered loss, being the difference between what he would have been able to recover from Rigby Cooke had the case been properly prepared (in such a manner as to prove his claim, and to rebut the defences advanced by Rigby Cooke), and the amount of the settlement sum; and
(j)while Mr Hind has some suspicions and concerns about the motivations of the law firm and counsel involved in his case, his real claim against the law firm is in negligence, not for breach of fiduciary duty.[4]
[4]Ibid [39]. Of course, my summary of what I considered to be Mr Hind’s case is not intended to suggest that the allegations made by Mr Hind or any of them, are true (or, for that matter, not true).

The current application

As noted above, Mr Hind served a proposed further amended statement of claim on 2 March 2021, following which the solicitors for the law firm wrote to Mr Hind, signalling their opposition to the filing and service of that document. The law firm stated as follows:

Our client opposes you having leave on the basis that (among other things):
1. The proposed further pleading is confusing in several respects;
2.The proposed further pleading is significant defective in that it does not plead all the necessary material facts relevant to establishing a cause of action against our client; instead it is often framed in general and conclusionary terms, which do not enable our client to know the case it is required to meet. In this regard we refer you to paragraph 52 of her Honour’s reasons;[5]
3.On page 6 of the proposed further pleading it is alleged that you were variously “pressured” and “forced” to settle the Rigby Cooke proceeding on 20 March 2014. It is not stated how you were so pressured or forced - this pleading is scandalous in its current form;
4.The last two lines on page 4 of the proposed further pleading in relation paragraph 10 reference the County Court litigation, in respect of which her Honour has previously ruled that summary judgment will be entered in favour of our client;
5.You have pleaded at paragraph 14 that damages assess at $5.5 to $6 million without providing any form of explanation or particularisation in relation to how damages of that magnitude have been assessed or calculated. Moreover, the assertion that damages assess at $5.5 to $6.5 million is contrary to paragraph 8, the particulars sub-joined to paragraph 12 and paragraph 14 of the proposed further pleading.

[5]Referring to the second reasons.

Following this letter, on or about 11 April 2021, Mr Hind circulated the proposed pleading. I will address the contents of the proposed pleading in more detail later in these reasons. The proposed pleading was accompanied by some further submissions from Mr Hind.

In these submissions, Mr Hind submitted, uncontroversially, that the law firm owed him a duty of care, but the law firm had failed to adequately document the terms of its retainer.

Mr Hind submitted that the law firm breached its duty of care, relying upon the following matters:

(a) the law firm’s inadequate preparation of the Rigby Cooke proceeding, in particular, its failure to address the issues of causation and contributory negligence, and its failure to pursue third parties prior to the expiry of the relevant limitations period “denied the plaintiffs the ability to properly articulate and pursue recovery of those financial losses”;

(b) by not making claims against third parties in addition to Rigby Cooke, despite the law firm’s knowledge of the relevant facts from late 2010, the law firm compromised the plaintiffs’ prospects of success in the Rigby Cooke proceeding; and

(c) Mr Hind submitted as follows:

The defendant’s lack of both actions and compassion towards the plaintiffs created the circumstances where the plaintiffs were forced to execute a deed of settlement in the Rigby Cooke proceeding for an amount substantially less than would otherwise have been reasonably expected, had the defendant conducted the proceeding in a manner to provide the best opportunity for success ongoing to trial.

The defendant’s inactions in the Rigby Cooke proceeding forced the plaintiffs to enter a situation of financial hardship that only existed due to his breach of his duty against the plaintiffs by not fulfilling his expectations of appointment.

Mr Hind submitted as follows in relation to his claim for loss and damage against the law firm:

The non-recovery of the plaintiff’s financial losses is solely due to the defendant’s inactions towards establishing causation in the Rigby Cooke proceeding, created the sequestration of events during and post settlement date being 20th March 2014, all of which was avoidable had the defendant used his skills and hidden abilities to have reasonably foreseen the issues of limitations in establishing causation.

Mr Hind’s submissions also referred to Mr Gronow QC’s unwillingness to assist him in formulating his claim, which has hampered his ability to present his claims.[6]
[6]On 16 November 2020, I made orders referring Mr Hind to the Victorian Bar’s Pro Bono Scheme in accordance with the protocols agreed between the Court and the Victorian Bar. Mr Gronow QC agreed to assist, and prepared a draft further amended statement of claim, which was one of the documents considered for the purposes of the second reasons. However, Mr Gronow QC was not able to further assist Mr Hind, by reason of his personal relationship with a potential witness in the proceeding, Mr William Alstergren QC, who is now the Chief Justice of the Family Court of Australia, and Chief Judge of the Federal Circuit Court of Australia. Mr Alstergren QC had been briefed by the law firm to represent Mr Hind in the County Court proceeding and the Rigby Cooke proceeding, but handed back his brief in the Rigby Cooke proceeding approximately a month prior to trial.

In its written outline of submissions filed on 16 April 2021, the law firm opposed the filing and service of the proposed pleading on the basis that the proposed pleading remains confusing and defective; and does not disclose the material facts necessary to establish a properly constituted cause of action.

The law firm observed that the proposed pleading is the latest of a series of attempts by Mr Hind to amend his statement of claim since the delivery of the first reasons in July 2020, and noted that, in the second reasons, I stated that I would grant Mr Hind one last opportunity to get his house in order.

The law firm referred to the relevant authorities concerning the adequacy of pleadings, and submitted as follows (omitting footnotes):

(a)an amendment which is futile because it is obviously bad in law will not be allowed; nor will it be allowed if it is defective as a pleading and would be liable to be struck out if it was in an original pleading;
(b)where there has been a failure to state all material facts, not merely to give sufficient particulars thereof, the proper course is to strike out the offending pleading;
(c)if the objectionable parts of a statement of claim are so intertwined with the rest of the pleading that separation is difficult, the appropriate course of action is to strike out the whole of the statement of claim.

The law firm observed that Mr Hind did not draft amendments to the January 2021 version, but rather seems to have started afresh, thus introducing new defects into the pleading. The law firm submitted as follows:

(a) [I]t remains confusing;
(b)it does not disclose material facts necessary to constitute any alleged cause of action for negligence. Rather, allegations of breach are expressed in broad and conclusionary terms;

(c) it contains new allegations lacking necessary material facts;
(d) it contains irrelevant subject matter;
(e)it refers to the County Court proceeding the subject of the summary judgment determination;

(f) it lacks paragraph numbers and otherwise it is unclear:
(i)what are intended to be particulars as distinct from allegations of material fact; and
(ii)what allegations ought to be addressed by way of defence.

The law firm then went on to make detailed submissions with respect to the particular paragraphs of the proposed pleading, which will be addressed later in these reasons.

At the hearing of Mr Hind’s application on 19 April 2021 the law firm submitted that:

(a) the proposed pleading does not make clear the case which it has to meet;

(b) the proposed pleading is worse than the January 2021 version, as the proposed pleading attempted to include “everything”, with the result that it is not possible to figure out precisely what is alleged against the law firm;

(c) Mr Hind’s allegation in the proposed pleading concerning contributory negligence is misconceived and irrelevant;

(d) Mr Hind’s claims against the law firm with respect to the Rigby Cooke proceeding are made at a high level and are unclear, smack of dissatisfaction with the outcome of the Rigby Cooke proceeding, and could not survive a strike-out application;

(e) if the Rigby Cooke proceeding had gone to trial, Mr Hind would been able to resist an apportionment defence by Rigby Cooke on the basis that, at the time any additional defendants were joined, the limitation period for any claim Mr Hind had against them would have expired. The law firm also submitted that Mr Hind had previously been involved in litigation against one of the additional defendants and had entered into a settlement agreement with that party, which would have further complicated any joinder of that defendant;

(f) Mr Hind was required by previous orders to nail his colours to the mast on this occasion, but he has been unable to do so, and that, in circumstances where the pleading fails to disclose the material facts necessary to constitute a viable cause of action, the Court is entitled to apply the principles set out in paragraph 33 of these reasons to refuse leave to file and serve the proposed pleading; and

(g) the consequence of Mr Hind’s failure to plead the material facts necessary to make good a claim in negligence is that leave to file and serve the proposed pleading should be refused, and the proceeding should be dismissed. The law firm submitted that significant costs have been incurred by the law firm, and there may be significant costs consequences for Mr Hind if this proceeding were to continue.

In response, Mr Hind submitted that he still believes he has a good cause of action against the law firm by reason of its poor preparation for the trial of the Rigby Cooke proceeding, and the events that led up to the settlement of the Rigby Cooke proceeding. He asked whether the Court could assist him to obtain pro bono legal advice to enable him to properly articulate his claim, as he had unsuccessfully tried to obtain assistance from Justice Connect.

In reply, the law firm submitted that the problem is not Mr Hind’s articulation of the claim, but that Mr Hind has failed, even in his extensive verbal submissions, to identify any act of negligence on the part of the law firm. The problem is not Mr Hind’s inability to get legal assistance, but the instructions Mr Hind is able to provide any lawyer.

Essentially, there are two issues before me. First, does the proposed pleading comply with the requirements of a pleading, and, more specifically, does the proposed pleading address the matters I stated in the second reasons needed to be addressed? If not, where to from here? While the Court has provided Mr Hind with a number of opportunities to get his case into shape, the reality is that, more than two years after the commencement of the proceeding, the proceeding is still at an embryonic stage. One trial date has been set and lost, and there is no prospect of a further trial date being set until the pleadings are finalised. If the matter proceeds, based upon the current state of the Court’s lists, a trial will not be held until 2023.

The proposed pleading

When considering the proposed pleading, it is instructive to consider my observations regarding the January 2021 version. The January 2021 version was a concise document, and, after making some allowances for some clumsiness of expression, was in a largely conventional form. While the law firm criticised Mr Hind’s formulation of his claim for loss and damage, I observed that the question of loss and damage was a matter for particulars and evidence, rather than pleading. As previously noted, the denial of leave to file the January 2021 version was based upon two issues:

(a) first, Mr Hind had to “nail his colours to the mast” with respect to the conduct on the part of the law firm which was said to have caused him loss: the law firm’s negligent conduct of the proceeding in the lead up to the trial, or the law firm’s advice to settle the proceeding at what Mr Hind considered to be an undervalue; and

(b) if it was the former (that is, Mr Hind had no choice but to settle the Rigby Cooke proceeding by means of the law firm’s negligent conduct in the preparation of the proceeding for trial, thus weakening his bargaining position vis-à-vis Rigby Cooke), Mr Hind needed to specify with a reasonable degree of precision the deficiencies in the law firm’s preparation of the Rigby Cooke proceeding. Again, what should the law firm have done that it did not do?

Also in the second reasons, I observed that, while Mr Hind’s pleading was still deficient, the version circulated for consideration in January 2021 (‘January 2021 version’) was a considerable improvement on previous iterations of the proposed further amended statement of claim. However, there remained a number of deficiencies in the January 2021 version which persuaded me that I should not grant leave for the filing of the January 2021 version.

The second reasons concluded as follows:

As observed above, the January 2021 version does not yet meet the requirements of a proper pleading. However, it is a significant advance on previous versions, which supports my conclusion that Mr Hind should be given one last opportunity to get his house into order ...[7]

[7]Ibid [55].

In relation to the issues referred to in paragraph 40(a) above, while reference is made in the proposed pleading (at paragraph 15) to the law firm pressuring the plaintiffs to settle the Rigby Cooke proceeding, it is tolerably clear from the balance of the proposed pleading and Mr Hind’s submissions that Mr Hind intends to allege that at the mediation with Rigby Cooke immediately prior to trial in March 2014, the plaintiffs were in a poor bargaining position by reason of the inadequate preparation of the Rigby Cooke proceeding by the law firm. In those circumstances, while I accept Mr Hind is aggrieved by what he considers to be rough treatment at the hands of his lawyers leading up to and during the course of those settlement negotiations, his allegations in that regard have no real relevance to his primary claim in this proceeding, and the inclusion of these allegations in the proposed pleading only causes confusion.

The same can be said for the reference to the County Court proceeding in paragraph 16 of the proposed pleading, and with respect to the rather vague allegations in paragraph 6 of the proposed pleading to the effect that the law firm “did not present any written reference for his terms of appointment to the plaintiffs”. There is no real dispute about the terms of the law firm’s retainer, or the existence of a duty of care, and Mr Hind’s allegations regarding these matters, along with his allegations regarding the conduct of his lawyers in the lead up to trial in February and March of 2014 raise false issues,[8] which causes confusion about how he puts his case, and will distract attention from the real issues in the proceeding.
[8]For completeness, my reference to the “false issues” should not be taken as a finding that Mr Hind’s allegations regarding these matters are not true. Rather, they are false issues because they are not directly relevant to Mr Hind’s claim in this proceeding.

Turning now to the contents of the proposed pleading, subject to my comments above regarding the false issues, paragraphs 1 to 6 of the proposed pleading are unobjectionable. Similarly, while I accept the law firm’s criticisms of paragraphs 12 to 14 inclusive regarding Mr Hind’s claim for damages, those criticisms are not fatal to Mr Hind’s application for leave to file and serve the proposed pleading. If the matter proceeds, in due course I could order that Mr Hind file and serve detailed particulars of loss and damage in a separate document, perhaps in conjunction with the filing of any expert evidence.

The critical paragraphs of the proposed pleading are paragraphs 7 to 11 inclusive, which contain Mr Hind’s attempts to plead how the law firm breached its duty of care to him by reason of its conduct of the Rigby Cooke proceeding. Paragraph 7 of the proposed pleading provides as follows:

Where the professional negligence claims make’s [sic] allegations against Rigby Cooke, in that they:
(a)Poorly prepared and lack of presentation in demonstrating that Rigby Cooke were negligent by settling the Nobleplace loan that was deficient to the issue of interest capitalisation.
(b)Poorly prepared to proceed to trial.
(c)Failed to address the issues of causation and contributory negligence as to the attribution of responsibility to the plaintiff’s financial losses, creating limitation issues in relation to third parties.
(d)Failed to defend the claim made by Rigby Cooke that the plaintiff did not fully fund the development and was entirely responsible for his own financial losses suffered, thereby denying any liability.
(e)Due to their poor preparation in the handling of the Rigby Cooke proceeding, caused the plaintiff to settle for a sum of money vastly below what could have been reasonably realised by a profit and or retention of 11 apartments.
(f)Caused the plaintiff to settle an amount that was inadequate to pay the GST obligations to the ATO, that subsequently made the plaintiff bankrupt on 22nd July 2014.

The law firm submitted that the preamble to paragraph 7 of the proposed pleading refers to the conduct of Rigby Cooke, not the law firm, and, inconsistently with earlier documents or statements by Mr Hind to the effect that Mr Hind hoped to retain three to four units in the development, paragraph 7 asserts that Mr Hind hoped to retain 11 units in the development. The law firm submitted that the allegations of wrongdoing against the law firm remain conclusionary, and the proposed pleading lacks material facts as to what the law firm should have done that it did not do.

Paragraph 8 of the proposed pleading is headed “Rigby Cooke proceeding (S CI 2010 06909)”, and includes a page and a half of narrative concerning the plaintiffs’ claims in the Rigby Cooke proceeding, concluding with an allegation that the plaintiffs had a genuine claim in the Rigby Cooke proceeding, valued by Mr Hind’s expert accountant at $1.5 million plus costs.

The law firm observed that the contents of this paragraph largely concern background information, but it is not clear whether the law firm is required to plead to this paragraph in its defence. Further, this paragraph also includes an allegation that Rigby Cooke’s conduct led to the problems with the ATO which ultimately led to Mr Hind becoming bankrupt.

Paragraph 9 of the proposed pleading provides as follows:

At all material times the defendant owed the plaintiff a duty of care, to apply his specialist knowledge and skill particularly in the area of professional negligence in fulfilling his obligations under the terms of the retainer:
Particulars
That on the 17th November 2010 the execution of a costs agreement under the Legal Professions Act 2004 along with the subsequent invoicing, both expresses and implies the existence of a relationship between the plaintiffs and the defendant Ron Segal on behalf of Ronsel Investments Pty Ltd to represent them in the Rigby Cooke Proceeding as their solicitor for a professional negligence claim to recover their financial losses incurred from the settlement of a loan known as Nobleplace Pty Ltd by Rigby Cooke Lawyers, and in doing so, initiated a professional relationship to conduct himself with utmost skill and ability as would reasonably be expected of a prudent legal practitioner in a negligence claim.
The defendant’s knowledge was sourced from information provided to the defendant between the plaintiff in conversations and written correspondence between late 2010 until early 2014, in addition to allegations and issues raised by the Rigby Cooke defence regarding causation and contributory negligence and their denial of any form of liability by Rigby Cooke Lawyers, to such an extent, where the plaintiff was allegedly to be fully liable for his own financial losses.

The law firm submitted that the particulars to paragraph 9 of the proposed pleading are confusing.

Paragraph 10 of the proposed pleading provides as follows:

By virtue of the defendant failing not to apply his specialist knowledge and skill in the area of professional negligence has therefore not fulfilled his obligations under the terms of the retainer, has resultantly breached his duty of care owed to the plaintiff ...

Then follow a number of unnumbered paragraphs, which are somewhat clumsily expressed, as can be seen from the following:

…
In representing the plaintiffs, the defendant was tasked with the onus reasonably expected in conducting a negligence claim particularly in relation to issues of witness and expert reports, causation and contributory negligence and the attribution of responsibility, which was substantially deficient, leading to poor trial preparations, a forced settlement in the Rigby Cooke proceeding and bankruptcy for the first plaintiff Mr Gregory Roy Hind.
The defendant’s inactiveness in both causation and contributory negligence from third parties for their potential liability exposure to the alleged negligent act, was at no stage undertaken and therefore consequently not established.
The defendant being inactive to these crucial issues, created limitation problems for all the potential third parties to be attributed for any liability, where that due to limitations, no legal liability could be claimed other than against Rigby Cooke lawyers, a fact that a skilled and competent legal practitioner should have been able to reasonably foreseen.
The absence of the defendant’s efforts to both undertake and establish liability has denied the plaintiffs the opportunity to properly articulate and present their claim to both the court and the Rigby Cooke legal counsel in attempting to recover financial losses suffered.
This in combination with lack of due diligence for trial preparation placed the plaintiffs in an unfair situation to the extent where the defendant placed undue pressure not to proceed to trial, rather demanding the plaintiffs execute a deed of settlement on 20th March 2014 for an amount substantially below that was reasonably expected had the matter proceeded to trial ...

Setting aside the question of whether the allegations of breach of duty have been expressed in vague and conclusionary terms, in the paragraphs reproduced above, Mr Hind has identified three distinct issues in the Rigby Cooke proceeding which he said were not “addressed” by the law firm:

(a) the plaintiffs’ claims in the Rigby Cooke proceeding were met by allegations by Rigby Cooke to the effect that the losses claimed by the plaintiffs were not caused by Rigby Cooke (‘causation issue’);

(b) that the plaintiffs were at least in part responsible for their own predicament (‘contributory negligence issue’); and

(c) further, the law firm failed to resist Rigby Cooke’s application to join other potential defendants to the Rigby Cooke proceeding (being a finance broker and a builder involved in the development project) (‘third parties’), and further or alternatively, the law firm failed to take steps to join the third parties as defendants within the applicable limitation periods (‘joinder issue’).

While not expressly stated as such in the proposed pleading, the relevance of the causation issue goes to the question of whether Rigby Cooke had breached its duty to the plaintiffs in a manner which caused them to suffer loss and damage, and the quantum of any loss and damage in the event that there was a finding that Rigby Cooke had breached its duty to the plaintiffs which was attributable to the conduct of Rigby Cooke. The contributory negligence issue is related to the causation issue, and also goes to the question of any damages payable to the plaintiffs should Rigby Cooke be found to have provided negligent advice to the plaintiffs.

The joinder issue in effect rolls up three separate issues. First, whether the law firm had done enough to oppose the joinder of the third parties, for the purpose of Rigby Cooke pressing its defence based upon the proportionate liability provisions of the Wrongs Act 1958 (Vic) (‘proportionate liability defence’), thus potentially reducing any damages payable by it to the plaintiffs following any trial if Rigby Cooke had been found to be negligent. Secondly, once the third parties had been joined, whether the law firm had done enough to counter Rigby Cooke’s contention that any damages payable by it ought to be substantially reduced by reason of the contribution of the third parties’ conduct to the plaintiffs’ losses.

The third “joinder issue”, which seems to have only been recently raised by Mr Hind, is that the law firm was negligent in failing to join the third parties as defendants to the Rigby Cooke proceeding prior to the expiry of the relevant limitation periods. No information is provided in the proposed pleading as to the role of the third parties in the transactions underlying the Rigby Cooke proceeding, when those limitation periods may have expired, or the nature and value of the claims the plaintiffs may have had against the third parties or any of them.

Paragraph 10 of the proposed pleading also includes two pages of particulars, which include a detailed chronology of events in the Rigby Cooke proceeding. It is tolerably clear that Mr Hind, in preparing this chronology, sought to highlight the occasions on which he said the law firm’s attention should have been drawn to the causation issue, the contributory negligence issue, and/or the joinder issue, namely:

(a) the filing of Rigby Cooke’s defence on 22 February 2011;

(b) the mediation of the Rigby Cooke proceeding on 28 June 2012;

(c) the filing of Rigby Cooke’s amended defence in October 2012;

(d) a directions hearing before Macaulay J on 15 February 2013;

(e) when the matter was set down for trial in June 2013;

(f) the making of the application by Rigby Cooke to join third parties as additional defendants for the purpose of relying upon the proportionate liability defence, which was heard by Vickery J on 19 December 2013;

(g) the memorandum from counsel dated 21 February 2014 regarding preparation for trial; and

(h) the further mediation held on 5 March 2014.

The last three paragraphs in the particulars to paragraph 10 refer to attempts to retain new counsel for the trial of the Rigby Cooke proceeding, the adjournment of the trial from 7 October 2013 to 23 March 2014, and the allegation that the law firm pressured the plaintiffs to settle the Rigby Cooke proceeding for $220,000, being an amount vastly below Mr Hind’s expectations, and the true value of the plaintiffs’ claims in the Rigby Cooke proceeding.

The law firm submitted in relation to the paragraphs under paragraph 10 of the proposed pleading summarised in paragraphs 53 and 54 above, as follows:

(a) they are repetitive, confusing, vague, and conclusionary;

(b) they fail to set out the material facts as to what the law firm should have done that it did not do;

(c) they introduce new allegations of wrongdoing against the law firm in relation to the joinder issue without any supporting material facts, and which are potentially inconsistent with Mr Hind’s allegations that the law firm failed to properly prepare the claim against Rigby Cooke; and

(d) the allegations to the effect that the law firm placed undue pressure on the plaintiffs to settle the Rigby Cooke proceeding is embarrassing, as, among other things, it fails to address my finding in the second reasons that Mr Hind was required to specify what he says was the law firm’s negligent conduct: that is, the preparation of the case or the advice to settle.

As for the particulars under paragraph 10 of the proposed pleading, the law firm submitted as follows:

…
(f)there are three pages of unnumbered paragraphs of particulars commencing at page 6, containing (inter alia) allegations regarding the conduct of the Rigby Cooke proceeding without supplying necessary material facts or else particulars as to what the defendant should have done that it did not do, beyond restating various vague and conclusionary allegations. Further:
(i)allegations on page 7 concerning observations of his Honour Justice Vickery are irrelevant, confusing and implausible;
(ii)the allegation in the last paragraph on page 7 that the plaintiff had fully funded the Rigby Cooke proceeding for trial on 23 March 2014 is contrary to previous submissions, and the allegations that there was a toxic relationship with Mr Segal and that he became disinterested are embarrassing and scandalous;
(iii)the remaining paragraphs are embarrassing and scandalous, containing (inter alia) vague allegations of serious concerns regarding trial preparation, and that the plaintiff was pressured into executed a deed of settlement ...

Paragraph 11 of the proposed pleading provides as follows:

The plaintiff was placed in a disadvantaged position leading up to the trial date due to the defendant’s failure inaction for causation which should have reasonably foreseen and was forced to settle on inadequate terms by reason of the defendant failing to properly prepare the case for trial, a fact confirmed by the defence’s concern for liability demonstrated in correspondence dated 18th December 2013 and the hearing the following day in the Supreme Court with the Proportionate liability defence involving Firm Finance Brokers being successfully introduced as a co-defendant.

The law firm submitted that this paragraph once again alleges that the plaintiffs were forced to settle the Rigby Cooke proceeding on inadequate terms, and is thus embarrassing, in that the law firm cannot understand the case it has to meet. Further, the allegation in paragraph 11 that the law firm failed to adequately prepare for trial is vague and conclusionary, and was not supported by the facts pleaded in that paragraph.

Further comments regarding the critical paragraphs of the proposed pleading follow.

The adequacy of the proposed pleading

First, paragraph 8 of the proposed pleading makes an allegation to the effect that the law firm was retained to conduct the Rigby Cooke proceeding. This effectively repeats the allegations in paragraph 6 of the proposed pleading. The narrative in this paragraph provides more detail regarding the plaintiffs’ claims in the Rigby Cooke proceeding than would ordinarily be required in a pleading. However, if these paragraphs (save for the paragraphs referring to GST and, by implication, the County Court proceeding) were included as particulars to paragraph 6 of the proposed pleading (excluding the last sentence of paragraph 6, in accordance with my observations at paragraph 44 above), those paragraphs would be unobjectionable. The law firm would not be required to plead to particulars.

Secondly, paragraph 7 of the proposed pleading is clumsily expressed, and sub‑paragraphs (e) and (f) relate to loss and damage, not breach, but, with the provision of further material facts, is salvageable as a plea of breach of duty, as discussed further below.

Thirdly, paragraph 9 pleads that the law firm owed Mr Hind a duty of care, which is unremarkable, and is unlikely to be denied by the law firm. This plea should logically follow paragraph 6 of the proposed pleading, as amended. The particulars under paragraph 9 are repeated elsewhere, and are unnecessary.

As for paragraph 10 of the proposed pleading, which is extremely lengthy, and difficult to follow, to the extent that reference is made to the alleged pressure upon the plaintiffs to settle the Rigby Cooke proceeding is made, these paragraphs should be excluded (being the first three paragraphs on page 6 of the proposed pleading, and the last five paragraphs under paragraph 10 of the proposed pleading), as they raise false issues.

As for the balance of paragraph 10 of the proposed pleading, I agree with the law firm that this paragraph fails to properly articulate Mr Hind’s case, and to provide the law firm with sufficient notice of the case that it needs to meet at trial.

Stepping back a bit to look at the broader picture, the position of the plaintiffs in late 2010 (when the law firm commenced acting for the plaintiffs) the plaintiffs had an asset, being their claims in the Rigby Cooke proceeding. The value of that asset was dependent upon a number of variables, some of which were within the control of the law firm, but many that were not. Variables not within the control of the law firm included the strengths and weakness of the plaintiffs’ case in the Rigby Cooke proceeding, as it logically follows that the strengths and weaknesses of the plaintiffs’ case depended upon what happened when Rigby Cooke acted for the plaintiffs, not when the law firm acted for the plaintiffs.

As far as I can glean from the materials, Rigby Cooke vigorously defended the plaintiffs’ claims in the Rigby Cooke proceeding on the basis that they had not been negligent in advising upon financing options for the development project, but in any event, any losses (whether they were wasted costs or loss of profits) suffered by the plaintiffs were caused not by Rigby Cooke’s advice, but by one or more of the third parties, and/or the plaintiffs’ own conduct in tackling the development project without the financial wherewithal to do so. These issues, it seems, caused Rigby Cooke and those advising it to take a fairly bullish approach to the plaintiffs’ claims in the Rigby Cooke proceeding, with Rigby Cooke offering only a paltry sum at the first mediation in 2012, and an amount far less than Mr Hind’s expectations at the door of the court in March 2014.

The law firm was not, and could not be, responsible for the inherent strengths and weaknesses of the plaintiffs’ case. It could not be, subject to some qualifications, responsible for the view Rigby Cooke and its legal representatives held regarding the value of the plaintiffs’ claim, which in turn influenced what settlement offers Rigby Cooke was prepared to make. We will never know what the true value of the plaintiffs’ claims in the Rigby Cooke proceeding was, as the Rigby Cooke proceeding never proceeded to trial and judgment. However, the duty upon the law firm was to take reasonable steps to ensure that the plaintiffs recovered a reasonable value for their asset (that is, the value of their claims against Rigby Cooke), and to not take steps which unduly damaged the value of that asset, or indeed cause the plaintiffs to suffer further losses. Reasonable steps could include any one or more of the following:

(a) marshalling the necessary lay and expert evidence to prove the material facts alleged by the plaintiffs in the Rigby Cooke proceeding, and to meet the defences advanced by Rigby Cooke, and providing Rigby Cooke and its lawyers with sufficient notice of that evidence in order to persuade them that their bullish perceptions of the plaintiffs’ prospects of success in the Rigby Cooke proceeding were wrong;

(b) giving due consideration as to whether any third parties should be joined as defendants to the Rigby Cooke proceeding in order to maximise the plaintiffs’ potential recovery of damages, having regard to any relevant limitation periods; and/or

(c) providing the plaintiffs with reasoned, realistic and well-informed advice as to their prospects of success in the Rigby Cooke proceeding. It may well be that if their prospects of success were as poor as contended for by Rigby Cooke, the better advice may have been not to proceed, although I am not in a position to say whether that was in fact the case.

The particulars to paragraph 10, as summarised in paragraph 58 of these reasons, refer to the occasions on which Mr Hind said the law firm should have been alerted to the causation issue, the contributory negligence issue, and the joinder issue. As such, they are unobjectionable, if a little verbose and confusing. It would be preferable if they were expressed in more concise terms. However, what paragraph 10 of the proposed pleading really lacks is an explanation as to precisely what the law firm should have done in order to address these issues. What evidence should it have assembled, and from whom, to address these issues? Should they have applied to join the third parties as defendants, and if so, when? Or should the law firm have reached a conclusion that the effect of these issues, or any of them, had such an impact on the plaintiffs’ claims that the most prudent course of action for the plaintiffs was for them to cut their losses and try and achieve the best possible settlement at the earliest possible time, and advise the plaintiffs accordingly? It is insufficient to simply refer to the law firm’s failure to address these issues, or to the law firm’s poor preparation in general terms, without the detail necessary to enable the law firm to respond to Mr Hind’s allegations.

For completeness, paragraph 11 of the proposed pleading is conclusionary, but if the necessary details of the law firm’s negligent conduct were provided by Mr Hind, as suggested above, it would not of itself be objectionable. As it stands, it does not add much to the proposed pleading.

Further, as previously noted, paragraphs 12 to 14 inclusive, which concern loss and damage, are confusing, and contradictory, given the reference to the plaintiffs retaining eleven units in the development project, not three or four. Also, at some stage Mr Hind is going to have to grapple with the fact that, given both he and his mother were plaintiffs in the Rigby Cooke proceeding, the damages claimable by him in respect of the alleged damage to the value of the plaintiffs’ asset will have to be reduced to take into account the fact that he and his mother were partners in the development project, and co‑plaintiffs in the Rigby Cooke proceeding. However, the question of the provision of proper particulars of loss and damage can be deferred to another day.

Finally, as previously noted, paragraphs 15 and 16 of the proposed pleading raise false issues, and should be deleted.

Accordingly, in order to go forward, the proposed pleading could be amended as follows:

(a) an amendment to paragraph 6 of the proposed pleading should be made to delete the second sentence, and to include the contents of paragraph 8 of the proposed pleading as particulars to paragraph 6 of the proposed pleading;

(b) paragraph 9 of the proposed pleading should follow paragraph 6. The second paragraph of the particulars under paragraph 9 of the proposed pleading is confusing and unnecessary, and should be deleted;

(c) an amendment to the first sentence of paragraph 7 of the proposed pleading should be made to make it clear that Mr Hind’s allegations of breach of duty are directed at the law firm, not Rigby Cooke, and sub‑paragraphs 7(e) and (g) of the proposed pleading should be deleted;

(d) paragraphs 10 and 11 of the proposed pleading require substantial work, as discussed further below;

(e) subject to the provision of further and better particulars of loss and damage, paragraphs 12 and 13 can stand as a plea of loss and damage. Paragraph 14 of the proposed pleading is unnecessary, and should be deleted; and

(f) paragraphs 15 and 16 of the proposed pleading should be deleted.

Turning now to the allegations of breach of duty in the proposed pleading, the statement in the bolded first paragraph in paragraph 10, and paragraph 11 (excluding the part of paragraph 11 after the words “prepare the case for trial”, which are confusing and unnecessary), are conclusionary, but are acceptable as an introduction to the pleading of breach of duty. The particulars under paragraph 10, which identify the occasions upon which Mr Hind says the law firm should have been alerted to the causation issue, the contributory negligence issue, and the joinder issue, could be kept, albeit in a summary form, such as set out in paragraph 58 of these reasons, as they do assist the law firm and the Court to understand how Mr Hind puts his case.

What is entirely missing from the proposed pleading is as follows:

(a) an explanation of the causation issue, the contributory negligence issue, and the joinder issue, and their impact upon the value of the plaintiffs’ claim in the Rigby Cooke proceeding; and

(b) noting that these issues arise out of or are connected with the underlying weaknesses in the plaintiffs’ case in the Rigby Cooke proceeding, and as such were not within the direct control of the law firm, what did the law firm need to do to address these issues? What effect did the law firm’s failure to address these issues have upon the value of the plaintiffs’ claims in the Rigby Cooke proceeding? These questions need to be answered in some detail, and, could helpfully be addressed on an issue-by-issue basis.

While I accept that it is difficult for Mr Hind to formulate a claim based upon the alleged inaction and omissions of the law firm, as opposed to allegedly negligent actions, it is imperative that Mr Hind attempt to do so, and to do so precisely. For example, if the allegation is that the law firm failed to properly address the causation issue, Mr Hind needs to identify what the causation issue was, what steps needed to be taken by the law firm and when to address or negate the causation issue, and what impact the alleged failure of the law firm to do so had upon the value of the plaintiffs’ claims in the Rigby Cooke proceeding. As it currently stands, the proposed pleading only provides details (in the particulars to paragraph 10) of when the law firm was or should have been alerted to the issues, not what the law firm should have done once so alerted, and how and when.

A further issue which needs to be addressed in any draft further amended statement of claim is the impact, or the potential impact, of the steps the law firm should have taken upon Rigby Cooke’s perceptions of the strengths and weaknesses of the plaintiffs’ case in the Rigby Cooke proceeding.

It appears from the materials, and Mr Hind’s submissions in the various hearings before me in 2020 and 2021, that the objective of Mr Hind and the law firm in the Rigby Cooke proceeding was not necessarily to proceed to trial and final judgment, but to prosecute the Rigby Cooke proceeding in a manner which would result in a generous settlement offer from Rigby Cooke. It is not for me to comment upon the soundness of that strategy or otherwise, but it is relevant to the claim being made against the law firm in the current proceeding. In any event, Mr Hind does not take issue with the soundness of that strategy, but rather its execution.

However, for such a strategy to be effective, the law firm not only needed to undertake the steps necessary to address the weaknesses in the plaintiffs’ case against Rigby Cooke, being the causation, contributory negligence, and joinder issues, it also had to effectively communicate to Rigby Cooke that it had addressed those issues prior to trial, so as to convince Rigby Cooke to re‑evaluate its view of the plaintiffs’ prospects of success at trial, and increase the value of its settlement offers accordingly.

In that regard, there is nothing in the proposed pleading which explains how, if the law firm had done all or most of what they were supposed to do in preparing the plaintiffs’ case, which, I repeat, has not yet been spelt out, the law firm was going to persuade or convince Rigby Cooke to make an offer of settlement which was more in accordance with the plaintiffs’ expectations. All of the preparation in the world would not have mattered if Rigby Cooke did not alter its position in the litigation, particularly if, as seems to have been the case, the plaintiffs could not afford to conduct a full trial.

While I accept that the task facing Mr Hind is a difficult task, it seems to me that the proposed pleading is salvageable. Alternatively, Mr Hind might wish to revisit the January 2021 version, which, as I have previously noted, is in a more conventional form, and has the advantage of being reasonably concise. The second reasons includes some observations as to what is missing from the January 2021 version, which I have expanded upon further in these reasons.

Upon reviewing the January 2021 version afresh, it seems to me that paragraphs 1 to 9 of the January 2021 version are unobjectionable. The particulars under paragraph 8 could be augmented by adding paragraph 8 of the proposed pleading to the particulars under paragraph 8 of the January 2021 version. Paragraph 9(d) and the particulars to paragraph 12 of the January 2021 version, which refer to reputational harm, would need to be deleted, as would the references to the plaintiffs being forced to settle the Rigby Cooke proceeding in paragraph 11 of the January 2021 version, as again, this allegation raises a false issue. Paragraph 10 of the January 2021 version would of course need to be substantially reworked to provide the material facts upon which Mr Hind relies to establish that the law firm had breached its duty of care, as discussed in paragraphs 79 to 84 of these reasons. The particulars to paragraph 17 could be expanded to refer to the matters summarised at paragraph 58 of these reasons.

Should the proceeding be dismissed?

As can be seen from the discussion above, the proposed pleading is salvageable, as is the January 2021 version, but either version still requires a substantial amount of work to enable the law firm and the Court to understand precisely what Mr Hind says the law firm should have done that it didn’t do, and what impact the alleged inaction of the law firm had upon the value of the plaintiffs’ claims in the Rigby Cooke proceeding. I accept that the task facing Mr Hind is not an easy one, particularly without legal assistance, although the discussion in the previous section of these reasons should provide some guidance as to what is required of Mr Hind.

The law firm, however, has submitted that Mr Hind should not be given a further opportunity to get his pleading in order, and that the proceeding should be dismissed. While it was not expressed as such, the law firm’s submissions in that regard in effect amount to an application for dismissal for want of prosecution.

The situation currently facing the law firm and the Court is not that uncommon. There are numerous instances where self-represented litigants have been given considerable latitude by the courts to attempt to properly formulate a claim, often with a fair degree of guidance from the court, but in the absence of legal assistance which they have been unwilling or unable to obtain, they have not been able to formulate their claims in an acceptable way, even when a low bar was set for a self-represented plaintiff to clear.[9]
[9]See, for example, Karam v Palmone Shoes Pty Ltd [2012] VSCA 97; Knorr v CSIRO (No 3) [2012] VSC 529 (upheld by the Court of Appeal in Knorr v CSIRO [2014] VSCA 84; Sheehan v Brett Young (No 2) VSC [2015] 651; MacFadyen & Ellis v Bank of Queensland (No 2) [2014] VSC 653; Chapman v City of Greater Bendigo (No 2) [2018] VSC 486; Dickens v State of New South Wales (No 3) [2018] NSWSC 485 upheld by the New South Wales Court of Appeal in Dickens v State of New South Wales [2018] NSWCA 222; Karlsson v Griffith University [2020] NSWSC 365; Norman v Wall (No 7) [2021] NSWSC 222.

I recently had cause to consider the issue of when the Court’s patience with a self‑represented litigant should be exhausted in Russell v Murrindindi Shire Council (No 3)[10] (‘Russell’), where an elderly gentleman had great difficulty in formulating a comprehensible claim, and had been unable to procure assistance through the Scheme. In that case, I stayed the proceeding with liberty to apply rather than giving the plaintiff to file and serve a further pleading, or, as contended for by the defendants to that proceeding, dismissing the proceeding. In my reasons, I surveyed the relevant authorities, and stated as follows (omitting footnotes):
[10][2021] VSC 116.

There have been numerous occasions where the courts have, faced with a self‑represented litigant who is unwilling or unable to prepare a pleading in acceptable form, taken the draconian step of dismissing a proceeding. Generally, this step has only been taken after, following numerous attempts, a conclusion has been reached that there was no reasonable prospect of the plaintiff concerned being able to formulate a pleading at least without legal assistance, and the likelihood of the plaintiff obtaining legal assistance was negligible.
In Dickens v State of New South Wales, the Court of Appeal upheld a decision to dismiss a proceeding for ‘want of despatch and abuse of process’. The plaintiff, a self‑represented litigant, had his statement of claim struck out on two separate occasions, with leave to replead. At a further hearing, Adamson J struck out the third version of the statement of claim, described the pleading as:
… discursive, unparticularised and makes several rolled up allegations. It narrates events, the relevance of which to the causes of action alleged is not expressed.

After going into more detail regarding the deficiencies in the pleading, her Honour referred to the statements of the Court of Appeal in Karam v Palmone Shoes Pty Ltd to the effect that a self-represented litigant cannot be allowed to stand behind the shield of ignorance indefinitely, and went on to say as follows:
By repeatedly filing pleadings which do not comply with the UCPR, the plaintiff is abusing the processes of the Court. In effect, the plaintiff is demanding that the Court and the defendant work out his causes of action for him and endeavouring to cast an onus on the defendant to prove that there is nothing in the morass of inconsistent allegations that might ground a cause of action which might afford him no relief. It is no part of the Court’s function to provide a litigant with legal advice. Nor is the Court to ‘settle’ a defective pleading so as to remove the dross to expose and craft the allegations which might amount to a reasonable cause of action. In effect, the plaintiff is seeking to have the Court require the first defendant to plead to a claim which, because of its form, is not susceptible of a proper response in a defence.

Her Honour’s statement above was recently referred to by Lonergan J of the New South Wales Supreme Court in Norman v Wall (No 5). While Lonergan J did not disagree with Adamson J regarding the applicable principles in the case before her (where three previous iterations of the statement of claim had been struck out, and the self-represented plaintiffs had previously rebuffed an opportunity to seek pro‑bono legal assistance), she was able to identify material facts to ground a claim against the defendant, and provided the plaintiffs with one further opportunity to prepare a statement of claim limited to a single cause of action, and subsequently reactivated the previous reference to the local equivalent of the Scheme.
The dilemma currently facing me is difficult to resolve. On the one hand, Mr Russell has a claim against the defendants which is capable of being formulated, although I suspect that the prospects of him obtaining meaningful relief from the Court are less than stellar. He is of advanced years, has a number of health problems, and frankly concedes that he does not have the skill and ability to prepare a properly formulated statement of claim: the January 2021 document merely contains the instructions he would provide to a lawyer to enable the preparation of an amended statement of claim. And, while on occasion Mr Russell’s correspondence and presentation reflects his personal investment in doggedly pursuing his strongly felt grievances against the defendants, in my experience at least he does not appear to be trying to be difficult, or to be deliberately contravening the rules and protocols surrounding litigation. And finally, he has only had one statement of claim struck out, not four or five.
On the other hand, this proceeding is not progressing at an acceptable pace, and the best that Mr Russell can do is to promise to attempt to find pro-bono legal assistance (in circumstances where a prior application to the Scheme has been unsuccessful) to draw a further proposed amended statement of claim. In putting forward this proposal, he has in effect conceded that any further efforts by him personally will not progress the matter any further. [11]

[11]Ibid [31]-[36]. Since the preparation of those reasons, the plaintiffs in Norman v Wall (No 5) [2020] NSWSC 1062 once again failed to put forward an adequate pleading, and on 9 March 2021 Lonergan J dismissed the proceeding (see Norman v Wall (No 7) [2021] NSWSC 222).

There are of some material differences between the situation in Russell[12] and the circumstances of the current case. On the one hand, Mr Russell is elderly and infirm, and cannot type. Many of the documents he produced were unintelligible, and he had been unsuccessful in obtaining assistance from the Scheme. I had no confidence that, working alone, he could prepare an acceptable pleading. In the current case, Mr Hind does not suffer from the same impairments, and may have some prospects of obtaining further assistance from the Scheme. I also consider that, with further guidance, there is a real prospect that he could bring his pleading into an acceptable shape. And, like Mr Russell, I do not consider that Mr Hind is trying to be anything other than co‑operative in difficult circumstances.
[12]Ibid.

On the other hand, the proposed pleading is the seventh iteration of the draft further amended statement of claim. Mr Hind has been given a great deal of guidance by the Court, particularly in the October 2020 ruling, and in the second reasons. I cannot go any further in providing guidance than I have done in those decisions, and earlier in these reasons, without infringing the principle that while the Court must provide self‑represented litigants with assistance in order to ensure that a proceeding be conducted fairly, that assistance must be proportionate, as explained in the following passage in the decision of Derham AsJ in Austin v Dwyer:[13] (footnotes omitted)

It is the duty of the Court in relation to represented and unrepresented litigants alike to ensure that a hearing or trial is conducted fairly and in accordance with law. Procedural fairness is ‘an essential attribute of a court’s procedure’. It is a frequent consequence of self-representation that the Court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy. What a judge must do to assist a litigant in person depends on the litigant, the nature of the case, and the litigant’s intelligence and understanding of the case. The judge cannot be the advocate of the self-represented litigant, for the role of the judge is fundamentally different to that of an advocate. The judge must maintain the reality and appearance of judicial neutrality at all times and to all parties. The assistance must be proportionate in the circumstances - it must ensure a fair trial and not afford an advantage to the self-represented litigant.
The advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored. But the court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent. An unrepresented party is as much subject to the rules as any other litigant and, although the Court must be patient in explaining them and may be lenient in the standard of compliance which it exacts, it must see that the rules are obeyed, subject to any proper exceptions.[14]

[13][2018] VSC 770.

[14]Ibid [30]-[31].

Further, while Mr Hind may have some prospects of receiving further assistance from the Scheme, such assistance cannot be guaranteed. Further, the question of delay is relevant here: the matters complained of by Mr Russell in his proceeding took place between 2016 and 2019, and were ongoing. Here, the retainer of the law firm commenced in late 2010, and concluded in 2014. The Rigby Cooke proceeding concerned advice given by it to the plaintiffs in or about 2006. The law firm was first provided with a draft pleading raising allegations with respect to their conduct of the Rigby Cooke proceeding in late 2019, over eighteen months ago. It was for this reason, along with the fact that Mr Hind was erroneously prevented from filing a fresh proceeding in early 2020, that I allowed Mr Hind to amend his claims in this proceeding, as any attempt by Mr Hind to file a fresh proceeding after 20 March 2020 would have been met by a defence that his claims were time barred. However, since that time Mr Hind has prepared, and the law firm has been forced to consider at least seven versions of a draft further amended statement of claim. Mr Hind has been granted many indulgences.

However, while I am prepared to accept that it is possible to infer that the law firm has suffered prejudice merely by reason of the continuation of this proceeding and the passage of time, there is as yet no direct evidence before me as to any particular prejudice being suffered by the law firm by reason of Mr Hind’s failure to prepare an adequate pleading.

The dismissal of a proceeding without adjudication on the merits is a serious matter. That the Court has the jurisdiction to dismiss a proceeding for, in effect, want of prosecution, either pursuant to its inherent jurisdiction, or pursuant to s 29(1)(f) of the Civil Procedure Act 2010 (Vic) (‘CPA’)[15], is not in doubt. However, there is nothing in the authorities which post-date the enactment of the CPA to suggest that the principles traditionally governing applications for dismissal for want of prosecution no longer apply. These principles were recently summarised by Derham AsJ in Cappelleri v Cappelleri.[16] In that decision, his Honour referred to the adoption by the Court of Appeal in Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells[17] of the following statement in Department of Transport v Chris Smaller (Transport) Ltd:[18]
[15]Knörr v CSIRO & Ors [2014] VSCA 84 [67].
[16][2020] VSC 306 (‘Cappelleri’).
[17][1999] 3 VR 863 (‘Bishopsgate’).
[18][1989] AC 1197.

The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, e.g. disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been an inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants, either as between themselves and the plaintiffs, or between each other, or between them and a third party.[19]
[19]Ibid, 1203.

96 Derham AsJ went on to consider the following matters referred to by the Court of Appeal in Bishopsgate[20], being:

(a)the extent to which the Court should take into account the effects on the Court’s lists and resources likely to have been caused by the plaintiffs’ delay;
(b)whether the Court should only have regard to the time which has expired since the plaintiff chose to issue its writ because it was entitled to wait until almost the expiry of the limitation period before issuing it; and
(c)the absence of evidence as to prejudice making it impossible for the Court to infer prejudice either as to the risk of not having a fair trial whenever that may occur or as to the burden which the defendant must be under by being kept at risk in relation to a claim of the kind advanced. [21]

[20][1999] 3 VR 863

[21]Cappelleri, [39].

His Honour then went on to refer to the statements in the authorities to the effect that, in applications for dismissal for want of prosecution, the orderly management of Court business is not usually a relevant factor. Further, his Honour noted that when considering whether there had been inordinate and inexcusable delay, the Court should have regard to the time which had elapsed prior to the issue of the proceeding.[22] As for the question of how any consequential prejudice to the defendant could be established, his Honour went on to state as follows:

The third matter raised was the manner in which and the extent to which prejudice must be directly proved. The Court in Bishopsgate Insurance concluded that although there are many cases in which the necessity to establish prejudice has been stated as a condition precedent to the exercise of the power to dismiss for want of prosecution on the basis of delay, it is not correct to say that the defendant is obliged to allege that prejudice upon affidavit as opposed to asking the court to infer from all the circumstances of the case that prejudice has been or will be likely to be suffered. This is not to deny that prejudice, actual and potential, must be established: it is merely a reminder that proof of any issue can be established by circumstantial evidence and of the necessary process of inference from such evidence. The defendant is entitled to point to undisputed facts and ask the court to draw necessary logical inferences from them for this purpose.
The Court in Bishopsgate Insurance added that the analysis of prejudice involved the prejudice that has been and will be likely to be suffered by the defendant because of the delay and any prejudice it might have suffered in any event. So far as likely prejudice of the conduct of a fair trial is concerned, the critical time is the time at which the action is likely to be heard.
It is now authoritatively accepted that the question of whether a Court should take the exceptional step of dismissing a proceeding for want of prosecution does not necessarily depend upon how long has passed since the commencement of the proceeding. Nor is it necessarily dependent upon there being a lengthy period of inaction on the part of the relevant party. One can have a case where, although the proceeding has only been on foot for under a year, when one looks at what has happened at that time one can see that the proceeding has not moved to first base, let alone beyond it.[23]

[22]Referring to Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197.

[23]Cappelleri [42]-[44].

His Honour concluded as follows:

In addition to, and overlapping with, the matters identified by Lord Griffiths in Chris Smaller (Transport) …, there are five matters which the court will usually consider in the exercise of its discretion whether to dismiss a proceeding for want of prosecution, (1) the length of the delay, (2) the explanation for the delay, (3) the hardship to the plaintiffs if the action is dismissed and the cause of the action left statute barred, (4) the prejudice to the defendants if the action is allowed to proceed notwithstanding the delay, and (5) the conduct of the defendant in the litigation.
Athough it is convenient to have guidelines or rules for the exercise of a judicial discretion, it is obvious and has often been pointed out that when a general discretion is conferred upon a court its exercise cannot be fettered by such formulations. The court, upon an application for dismissal for want of prosecution, has a general discretion to be exercised upon a consideration of the relevant circumstances of the particular case; and the order for dismissal is to be made if, but only if, the court is satisfied that the justice of the occasion so demands it.[24]

[24]Ibid [47]-[48].

Accordingly, the position in the current application is finely balanced. Turning to the five matters referred to by Derham AsJ in the extract from Cappelleri[25] above, the delay has been significant. The proceeding in its first incarnation was commenced two years ago, and more than eighteen months have passed since Mr Hind prepared a draft pleading making allegations against the law firm with respect to its conduct of the Rigby Cooke proceeding, which in turn was served shortly prior to the expiry of the relevant limitation period. However, part of the delay, some nine months in total, can be attributed to delays in delivering the first and second reasons, and these reasons, along with the referral to the Scheme. The only real explanation for the delay is Mr Hind’s inability to date to prepare an adequate pleading. While that failure does not amount to blameworthy conduct, given the difficulties he faces, it hardly augers well for the future conduct of the proceeding.
[25][2020] VSC 306.

Further, while I accept that ordinarily, the orderly conduct of the Court’s business is not a relevant factor in applications for dismissal for want of prosecution, in my view, the efficient use of Court resources is a relevant factor in the circumstances of the current proceeding, as has been recognised in the authorities in similar cases,[26] particularly in light of the overarching obligations in the CPA. In the current case, there have been numerous hearings, and now four sets of written reasons, three of which concern Mr Hind’s attempts to formulate a viable statement of claim.
[26]See the authorities referred to in footnote 9.

As for the question of hardship to Mr Hind, if this proceeding is dismissed, he will obviously lose the opportunity to progress his claims against the law firm. However, at such an early stage of the proceeding, and in the absence of an adequate pleading, it is difficult to make an assessment of the potential value of Mr Hind’s claims against the law firm.

As for prejudice to the law firm, I have already observed that prejudice can be inferred from the length of time which has elapsed since the conclusion of the law firm’s retainer, and since the events which formed the subject matter of the Rigby Cooke proceeding. The prejudice to the law firm from having to repeatedly consider and make submissions with respect to the various iterations of the statement of claim can also be inferred: the law firm must have incurred significant legal costs, and given that Mr Hind was bankrupt until a few years ago, the prospects of recovering those wasted costs may well be poor. On the other hand however, there is no evidence of any particular prejudice to the law firm in conducting its defence, or to the fair conduct of the proceeding. The law firm’s file appears to be intact, and there is no evidence of any witnesses being unavailable. The evidence filed and submissions made on behalf of the law firm during the course of the hearings before me to date suggests that the law firm and its legal representatives have ready access to relevant documents.

Finally, there is no conduct on the part of the law firm in this proceeding which is relevant to the question of whether the proceeding should be dismissed.

On balance, given the absence of any evidence of specific prejudice being suffered by the defendant, and given that some progress has been made by Mr Hind in formulating his claim, I will provide Mr Hind with a further opportunity to attempt to file and serve a draft further amended statement of claim. I will also make a further referral to the Scheme, with sufficient information about the proceeding to enable any potential counsel to identify whether they would be embarrassed by giving assistance to Mr Hind by reason of any personal connection with the law firm or any likely witnesses. However, my position may well change if the next version of the pleading is defective, and if the law firm is able to put on evidence about any particular prejudice to it if the proceeding was not able to be progressed from here in an expeditious fashion.

Accordingly, I propose to make the following orders:

1. The plaintiff’s application to file and serve the proposed pleading, being the document dated 11 April 2021, and headed ‘Amended proposed amended statement of claim’ is refused.

2. The Co-ordinator is directed to lodge a request with the Scheme for assistance to the plaintiff to assist him to prepare a draft further amended statement of claim consistent with the reasons delivered today.

3. The proceeding be listed for further directions in the week following the parties and the Court being notified of the outcome of the request to the Scheme.

4. The defendant’s costs be reserved for determination on a date to be fixed at the next directions hearing.

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Citations

Hind v Ronsel Investments Pty Ltd (No 3) [2021] VSC 385

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Sitha v Lee [2024] VCC 666

Cases Citing This Decision

3

Boensch v Bingham [2023] NSWSC 1152

Hind v Ronsel Investments Pty Ltd [2024] VSCA 53

Sitha v Lee [2024] VCC 666

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[2021] VSC 385

1 July 2021