Legalese Pty Ltd v Aurora
[2009] SADC 8
•30 January 2009
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
LEGALESE PTY LTD v AURORA
[2009] SADC 8
Judgment of Her Honour Judge Simpson
30 January 2009
PROFESSIONS AND TRADES - LAWYERS - REMUNERATION
TORTS - NEGLIGENCE - PROOF OF NEGLIGENCE - SUFFICIENCY OF EVIDENCE
The plaintiff law firm claimed remuneration for work done on behalf of the defendant in respect of personal injury sustained by the defendant in a motor vehicle accident. The defendant alleged that he was not liable to pay legal costs, that the work done by the plaintiff was negligently performed, that he should have been advised to accept a filed offer to consent to judgment before the trial, and that he would have accepted a filed offer if he had been so advised and obtained his costs from the defendant in the action. Held: The plaintiff established due and proper performance of the work done on behalf of the defendant and the defendant is liable to pay the plaintiff for it. There is no basis for the defendant's claim for damages - there was no evidence of negligence - in any event the defendant did not establish that he had suffered damage as a result of the plaintiff's allegedly negligent work. An adjournment is granted to allow the defendant to apply for taxation of the bill of costs. Judgment is to be entered for the plaintiff in due course for the amount as certified on taxation or as agreed.
Legal Practitioners Act 1981 s 42; Civil Liability Act 1936 ss 40, 41; District Court Civil Rules 2006 rr 4, 54, 79(3), 272, referred to.
Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co [2001] SASC 313; Duke Group Ltd (in liq) v Arthur Young (Reg) (No 4) (1991) 55 SASR 24; F F Seeley Nominees Pty Ltd v El Ar Initiations (UK) Ltd and another (No 2) (1990) 55 SASR 314; Everingham and another v Mullins [2001] SASC 415; Heywood v Wellers (a firm) [1976] QB 446; Harris v AGC (Insurances) Limited (1985) 38 SASR 303; Horbelt v Raft Pools Pty Ltd (1987) 47 SASR 389; Astley v Austrust Ltd (1999) 197 CLR 1; Heydon v NRMA Ltd (2000) 51 NSWLR 1; Boland v Yates Property Corporation Ltd (1999) 74 ALJR 209; Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642; Midland Bank Trust Co Ltd and another v Hett, Stubbs & Kemp (a firm) [1979] Ch 384; White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169; D'Orta-Ekenaike v Victoria Legal Aid and another (2005) 223 CLR 1; Rogers v Whittaker (1992) 175 CLR 479; Capital Brake Service Pty Ltd v Sparke Helmore [2003] NSWCA 225; Hall and others v Foong (1995) 65 SASR 281; Studer v Boettcher [2000] NSWCA 263; Harvey v Phillips and another (1956) 95 CLR 235; Micarone and others v Perpetual Trustees Australia Limited and others (1999) 75 SASR 1; King William Chambers and Williamson & Co v Mobitel (International) Pty Ltd (1981) 29 SASR 316, applied.
LEGALESE PTY LTD v AURORA
[2009] SADC 8
This is an action brought by the plaintiff, Legalese Pty Ltd, a company trading as a law firm, to recover remuneration alleged to be due to it for the provision of legal services, legal representation and legal advice to the defendant, Mauro Aurora, at his request.
The pleadings
Statement of claim
By its statement of claim filed on 31 August 2007, the plaintiff claims the sum of $53,072.87, plus interest, for legal services provided, together with a further sum of $14,799.05 for disbursements associated with the work done for the defendant.
It has been agreed between the parties that the question of the liability of the defendant to the plaintiff should be determined first. If the defendant is found liable to the plaintiff, and if there is a dispute about the reasonableness of fees for work done, the quantum of fees and disbursements may then properly be the subject of taxation in the Supreme Court pursuant to section 42 of the Legal Practitioners Act 1981, which provides for a person who is liable to pay any legal costs to apply to the Supreme Court for taxation of a bill of costs.[1]
[1] King William Law Chambers and Williamson & Co v Mobitel(International) Pty Ltd (1981) 29 SASR 316 at 319
By consent an order was made by a Master on 5 December 2007 that the trial be restricted to the merits of the action, with the quantum to be taxed or agreed at a later date.
Defence
By his defence and counterclaim filed on 7 November 2007, the defendant admits that the plaintiff provided legal services, legal advice and legal representation at his request and that particulars of the work have been provided to him. The defendant denies that he owes the plaintiff the sum claimed or, in the alternative, alleges that the fees claimed by the plaintiff are excessive and that he has not been provided with a short or long form bill of costs.
While quantum is by agreement not in dispute at this stage of the proceedings, by amendment to its defence to counterclaim at trial, the plaintiff denies that the defendant has invoked the procedure prescribed in section 42 of the Legal Practitioners Act 1981 or under rule 272 of the District Court Civil Rules 2006, which provides for an application to the Registrar for adjudication (taxation) of costs. Notwithstanding, the plaintiff submits to taxation of its costs.[2]
[2] Paragraph 9 Amended Defence to Counterclaim
The defendant alleges that he entered into a contract with the plaintiff pursuant to which the plaintiff was to provide legal advice to him through its employed solicitor, Mr Peter Scragg. It is not in dispute that Mr Scragg, as an employee of the plaintiff, acted for the defendant in relation to a claim for damages for personal injury sustained by the defendant in a motor vehicle accident which occurred on 27 March 2004 (‘the personal injury claim’).
The defendant alleges that it was a term of the contract that Mr Scragg would at all times act in a competent and professional manner and provide competent and professional legal advice to the defendant in relation to the personal injury claim, including the defendant’s damages, associated loss, expenses and legal costs resulting from the motor vehicle accident.[3]
[3] Paragraph 17 and 18 Defence
The defendant also alleges that the plaintiff and/or its employed solicitor, Mr Scragg, owed the defendant a duty of care to provide competent, professional legal advice to the defendant in relation to the personal injury claim.[4]
[4] Paragraph 30
The plaintiff does not dispute the contract, nor that it was a term of the contract that the plaintiff and Mr Scragg provide competent and professional advice to the defendant, nor that the plaintiff and Mr Scragg owed the defendant a duty of care to provide competent, professional legal advice to the defendant in relation to the personal injury claim.
It is not in dispute that a claim for damages was formulated on behalf of the defendant against the company, Leed Engineering and Construction Pty Ltd (‘Leed Engineering’), by letter from the plaintiff dated 7 September 2004. Proceedings were issued on 23 December 2004 in District Court Action No 2083 of 2004 in respect of the defendant’s personal injury claim. The matter came on for hearing in this court on 7 May 2007. The action was dismissed by consent on 23 May 2007, the seventh day of trial, with no order as to costs.
By his defence in these proceedings[5] the defendant alleges that Mr Scragg, as the employee of the plaintiff, was in breach of contract and was negligent in breach of the duty of care owed to the defendant, and in breach of the Rules of Professional Conduct and Practice of the Law Society of South Australia,[6] in that he failed to provide competent and professional legal advice to the defendant in relation to the defendant’s damages, associated loss, expenses and legal costs associated with the personal injury claim as follows:
[5] Paragraphs 25-35
[6] Paragraph 35A, included by amendment to the Defence at trial
1.The defendant was assured that he would obtain a judgment in excess of the sum of $200,000, including a sum of $50,000 for economic loss for each year;[7]
[7] Paragraph 19
2.The defendant was advised by Mr Scragg on at least one occasion that his damages entitlement would exceed $200,000;[8]
3.The defendant was advised that there was no reasonable possibility that he would fail to prove liability and/or obtain an award of damages;[9]
4.The defendant was advised that he would be successful and therefore he would not be liable to the plaintiff or to Leed Engineering for any costs in the personal injury claim;[10]
5.At no stage was the defendant appropriately advised about the risk of his being found negligent, in part or altogether, and liable for the costs of Leed Engineering, and as a result, he lost the opportunity to accept any of the filed offers;[11]
6.The defendant was advised by Mr Scragg to reject the following offers to consent to judgment filed by Leed Engineering in the District Court action and to proceed to trial;
(i)An offer to consent to judgment in the sum of $20,000, exclusive of costs, filed on 13 February 2007;
(ii)An offer to consent to judgment for 20% of the damages to be assessed, filed on 13 February 2007;
(iii)An offer to consent to judgment in the sum of $29,500, exclusive of costs, filed on 16 April 2007; and
(iv)An offer to consent to judgment for 30 % of the damages to be assessed, filed on 16 April 2007. [12]
[8] Paragraph 21
[9] Paragraph 22
[10] Paragraph 25
[11] Paragraphs 35A and 35B
[12] Paragraphs 23, 24, 27, 28, 33 and 34
The defendant further alleges by his defence that any competent assessment of the risk of liability and the potential to obtain an award of damages in the personal injury claim would have resulted in advice to the defendant not to issue proceedings.[13]
[13] Paragraphs 26 and 32
Counterclaim
The defendant alleges in effect that he was not provided with competent and professional legal advice in relation to the offers which were filed by Leed Engineering in District Court Action No 2083 of 2004. The defendant alleges that competent and professional legal advice would have been that he should accept the filed offers to consent to judgment.
The defendant alleges that he would have considered such advice and that he would have accepted either the sum of $20,000 or 20% of his damages to be assessed, or in the alternative, either the sum of $29,500 or 30% of his damages to be assessed.
The defendant claims damages from the plaintiff by way of counterclaim in the sum of $29,500 from the plaintiff or, in the alternative, in the sum of $20,000.
Defence to counterclaim
By its defence to the counterclaim filed on 22 January 2008, the plaintiff denies that the advice given to the defendant in relation to filed offers to consent to judgment was incompetent or unprofessional as alleged by the defendant.[14]
[14] Paragraph 1
At the end of the evidence given by Mr Scragg, an application by the plaintiff for permission to amend the defence to counterclaim was granted to accord with evidence given.[15] The plaintiff says the proper advice regarding offers filed in February 2007 in District Court Action No 2083 of 2004, on the instructions and information to hand at the time, was that they were too low. As to the allegation in paragraph 24 of the defence that Mr Scragg advised the defendant to reject the offers filed on 16 April 2007, the plaintiff says, by amendment to the pleadings, that Mr Scragg discussed the offers with the defendant and recommended acceptance. The defendant instructed him to reject them.[16]
[15] Rule 54 District Court Civil Rules 2006; Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co [2001] SASC 313; Duke Group Ltd (in liq) v Arthur Young (Reg) (No 4) (1991) 55 SASR 24, at 26; F F Seeley Nominees Pty Ltd v El Ar Initiations (UK) Ltd and another (No 2) (1990) 55 SASR 314
[16] Paragraph 2A
Had the defendant accepted any of the offers, the plaintiff says that the defendant would have nonetheless incurred a substantial liability for legal costs and disbursements to the time of settlement.[17]
[17] Paragraph 10
The plaintiff denies that the defendant relied on any advice given to him in relation to offers filed on behalf of Leed Engineering in District Court Action No 2083 of 2004. The plaintiff says that the defendant was determined to go on with his claim. The defendant considered the filed offers to be inadequate and he was not prepared to accept, or would not have accepted, offers from Leed Engineering to compromise until the trial of the action, at which time the action was settled on the most favourable terms then available to the defendant.[18]
[18] Paragraphs 1, 4, 5, 6 and 10
The plaintiff alleges that during the trial in District Court Action No 2083 of 2004, the defendant made statements in the course of his evidence which were contrary to his instructions to the plaintiff and which were false, misleading and conflicting in relation to the circumstances of the motor vehicle accident and the loss of earning capacity and loss of enjoyment of life experienced by the defendant.[19] Independent counsel then representing the defendant recommended that the matter be settled on the best possible terms, having regard to issues of credit arising as a result of the evidence given by the defendant at trial.[20]
[19] Paragraph 4
[20] Paragraph 5
Litigation guardian
On 3 September 2008, the first day of trial in these proceedings, an application was made by counsel for the defendant for the appointment of the defendant’s daughter, Ms Emilia Marie Aurora, as litigation guardian. In support of the application, reliance was placed on the affidavit of Ms Snezana Ljubincic, the solicitor acting for the defendant, sworn on 1 September 2008. In her affidavit, Ms Ljubincic says that Andersons, solicitors, were instructed on 28 August 2008 by Ms Aurora to act for the defendant. Ms Ljubincic exhibited to her affidavit a copy of an Enduring Power of Attorney executed by the defendant and accepted by Ms Aurora on 18 July 2007. The power of attorney became effective upon execution of the deed and was to remain effective notwithstanding any subsequent legal incapacity suffered by the defendant.
As a result of what she had been told about the defendant’s mental state, Ms Ljubincic sought a report from the defendant’s treating neurologist, Dr David Schultz, by letter dated 29 August 2008. Dr Schultz was asked to address the following:
1.The nature of any mental disability suffered by the defendant;
2.Whether any mental disability suffered by the defendant prevented him from being able to look after his own financial and legal affairs;
3.Whether his medical condition rendered the defendant wholly or partially unable to give evidence in a court of law;
4.What could be said about the defendant’s level of comprehension generally.
In his report dated 30 August 2008 exhibited to the affidavit, Dr Schultz said that he had seen the defendant on one occasion only, 6 August 2008, and that most of the history he had obtained was provided by the defendant’s daughter. I put to one side the history of events and the opinions about the defendant’s personal injury claim offered to Dr Schultz by Ms Aurora. Dr Schultz noted the defendant’s medical history - diabetes since 1990, hypertension, hypercholesterolaemia, renal stones, gout and B12 deficiency - and the medication he was taking. After examining the defendant’s mental state, Dr Schultz’ opinion was as follows:
1.The defendant clearly had evidence of dementia, possibly frontotemporal dementia;
2.The defendant was unable to look after his financial and legal affairs;
3.His condition rendered the defendant unable to give evidence in a court of law; and
4.When he was seen on 6 August 2008 the defendant’s level of comprehension was poor, he tended to answer questions in a tangential manner and he had significant deficits on his mental state examination.
The evidence was that the defendant was a person under a disability in that he was not mentally able to manage his affairs.[21] Pursuant to rule 79(3) of the District Court Civil Rules 2006, Ms Aurora was permitted to be the defendant’s litigation guardian.
[21] District Court Civil Rules 2006, rule 4
Dux litis
An application was made by the plaintiff for the defendant to be dux litis. The application was refused.
The plaintiff claims for work done at the request of the defendant. The defendant admits that work was done at his request. The effect of the defence and counterclaim is that the defendant denies liability for the legal costs and disbursements claimed by the plaintiff on account of improper performance of work done by the plaintiff pursuant to the agreement under which the plaintiff sued. The defence and counterclaim put in issue the plaintiff’s performance of the agreement. It is well established that:
a client is entitled to an equitable set off of damages for solicitor's negligence against the liquidated claim of the solicitor for his costs - see Piggott v Williams (1821) 56 ER 1027 and article "Equitable Set Offs" by Dr ICF Spry - 43 ALJ 265. [22]
[22] Everingham and another v Mullins [2001] SASC 415; and see Heywood v Wellers(a firm) [1976] QB 446 at 458
On the pleadings, the defendant disputed his liability to the plaintiff for professional fees. In my opinion, the plaintiff carried the evidential burden to establish due performance. In any event, having regard to the issues raised on the pleadings and the circumstances generally, the fairest and most effective method of resolving the issues in the action was for the plaintiff to adduce its evidence first.[23]
[23] Harris v AGC (Insurances) Limited (1985) 38 SASR 303 at 307-309; Horbelt v Raft Pools Pty Ltd (1987) 47 SASR 389 at 396; Everingham and another v Mullins, above
The capacity of the defendant to give evidence
At the end of the opening by plaintiff’s counsel and before the first witness was called, counsel for the defendant applied, for the sake of convenience, to interpose a witness, Dr David Schultz. Counsel for the defendant advised the court that he did not intend to call the defendant and he wished to avoid adverse comment on that account from the plaintiff.[24] Dr Schultz’ evidence went only to his opinion regarding the incapacity of the defendant to give evidence at trial, an opinion apparently not accepted by the plaintiff without having the opportunity to cross-examine Dr Schultz. The application to interpose Dr Schultz was not opposed by the plaintiff.
[24] T 27
Dr Schultz said that he was a qualified neurologist. He had been asked to provide a report by the defendant’s solicitors. The letter from the solicitors to Dr Schultz, dated 29 August 2008, and the report he provided, dated 30 August 2008, were tendered by the defendant.[25] Dr Schultz said he had examined the defendant on 6 August 2008, when it was clear that the defendant was unable to answer questions appropriately or reliably. The history was obtained mostly from his daughter, Ms Emilia Aurora. On the basis of the history he obtained, radiological examination and mental state examination, Dr Schultz made a judgment, which he maintained under cross-examination, that the defendant was suffering from dementia, a gradual and progressive condition, as a result of which the defendant was unable to manage his legal affairs and unable to answer questions in a court of law.
[25] Exhibits D1 and D2 respectively
The plaintiff’s case
Mr Peter Scragg gave evidence. He is a legal practitioner who has practised in South Australia for over thirty years. In March 2004 he was a director and employee of the plaintiff. The defendant was a client of the plaintiff. Mr Scragg had acted for the defendant and his family previously on unrelated matters. Mr Scragg said that in the past he had carried out legal work for the defendant, rendered fee accounts to him for that work and those accounts had been paid.
Mr Scragg said that on Monday, 29 March 2004, he was in Port Adelaide at lunchtime. He saw the defendant and his wife quite by chance in a snack bar in Commercial Road. He noticed that the defendant had an injury to his left eye. Mr and Mrs Aurora told Mr Scragg that the defendant had had a bad accident on the previous Saturday when he had driven his car into a hole in the road. The defendant instructed Mr Scragg that he believed he had a claim in relation to the injuries he had sustained and gave Mr Scragg instructions to represent him.
Mr Scragg said he was aware that the scene of the accident could change, or might be undergoing change as he and the defendant were speaking. He obtained a second-hand camera and film and the defendant, his wife and Mr Scragg went to the scene of the accident, where Mr Scragg took photographs of the roadway and of the defendant. Mr Scragg said he prepared a statement, had the photographs developed[26] and saw the defendant, and he thought his wife as well, on the following day. He showed them the photographs and he took a statement from them relating to what was shown in the photographs.[27]
[26] Exhibit D25
[27] Exhibit P19
An arrangement was reached between the plaintiff and the defendant in relation to the costs associated with the defendant’s personal injury claim. The plaintiff and the defendant entered into a costs agreement dated 30 March 2004. The costs agreement related generally to the basis on which the plaintiff intended to charge the defendant, including amongst other things, to the scale of professional fees, the payment of disbursements, briefing counsel and accounts. The practice of the plaintiff was to render accounts on a monthly basis, even when there was no expectation of immediate payment.
Mr Scragg arranged for medical assessments and medical reports for the defendant. He wrote to Dr Keith Le Page, psychiatrist, and to Mr Brian Cohen, general surgeon, on 31 March 2004 requesting an assessment of the plaintiff and a report.
Mr Cohen saw the defendant on 23 April 2004. From the history he took and on examination, Mr Cohen noted symptoms consistent with the accident as follows: injury to the left eye; soreness of the joints of the neck, lower back, shoulders, elbows, wrists, fingers, knees and toes; headaches, blurred vision, loose tooth, dizzy spells, increase in deafness, and a whistling sound in the ears.[28]
[28] Exhibit P4
The defendant was first seen by Dr Le Page on 28 June 2004. Dr Le Page diagnosed a post-traumatic stress disorder. Dr Le Page saw the defendant again on 17 August, 1 September, 15 September 2004 and 29 March 2007.
Mr Scragg said it was not a routine accident because the defendant had driven into a hole in the road. Issues as to liability included whether or not the hole had been properly demarcated in the roadway and identifying the responsible party. Mr Scragg considered the Transport Authority, the Port Adelaide City Council and the contracting party, Leed Engineering, as possible defendants in the personal injury claim.
The plaintiff sent a letter before action dated 7 September 2004 to Leed Engineering, formulating a claim on behalf of the defendant.[29] The letter set out the circumstances of the accident, the consequences of it for the defendant and the basis of a claim in the sum of $109,055, in addition to past medical and treatment expenses and costs and disbursements. The letter is signed by Ms Rosita Scragg, a solicitor employed by the plaintiff.
[29] Exhibit P6
Proceedings were issued on 23 December 2004 on behalf of the defendant against the City of Port Adelaide Enfield, as the owner or occupier of Bedford Street, Gillman, where the defendant’s accident occurred and Leed Engineering & Construction Pty Ltd as the engineering and construction contractor carrying out the road works at the accident site. In brief, the statement of claim alleged that the defendants were negligent in creating a danger by the excavation of the road and by failing to give the plaintiff adequate warning of the hazard presented by the road works. Mr Scragg said that at the time of issuing proceedings, he believed the defendant had a reasonable prospect of success in his action.
The claim against the City of Port Adelaide Enfield was subsequently discontinued with no order as to costs after Mr Scragg accepted that the council was not responsible for the roadwork or for warning signs. Enquiries regarding other possible defendants continued in the first half of 2005.[30]
[30] Exhibits D26, D27
A defence was filed by Leed Engineering on 24 March 2005. The defence filed by Leed Engineering put both liability and quantum of damages in issue. Allegations of contributory negligence were made against Mr Aurora in that it was alleged he:
1.Failed to adhere to the barricades, warning signs and cones advising that Bedford Street was closed and the left side partially blocked to prevent vehicles entering and driving in a northerly direction between Eastern Parade and Kapara Road;
2. Failed to traverse the road with due care or attention;
3. Failed to keep a proper look out;
4. Failed to take any or any reasonable care for his own safety; and
5. Drove into the excavations.
On 22 November 2005, Mr Scragg discussed with the defendant how it might be established that he had been in fairly good health at the time of the accident, notwithstanding a series of accidents he had had over the years. The defendant was to try to obtain his medical records from his general practitioner. An application was brought for third party discovery of the medical notes on 19 January 2006 after some difficulty in obtaining the notes was apparently encountered.[31]
[31] Exhibit P19
On 24 November 2005, Mr Scragg wrote to the defendant about obtaining an expert report from a traffic engineer as to the adequacy or otherwise of the warnings of the danger presented by the excavation carried out by Leed Engineering in Bedford Street, Gillman, into which the defendant had driven, and asking the defendant to be present at a meeting with the expert.[32]
[32] Exhibit D28
On 6 December 2005, Mr Scragg wrote to Mr Philip Verco, technical director, Maunsell Australia Pty Ltd, an engineering firm, seeking an expert report on the circumstances of the defendant’s motor vehicle accident and, in particular, identification of the road hazard and its delineation, or lack of delineation, at the time of the accident.
Mr Verco’s report dated 26 February 2006 drew the following conclusions:
From the foregoing observations, and with reference to the documentation provided and AS 1742.3, the following conclusions are drawn.
·Mr Mauro Aurora was clearly travelling in the wrong direction and in fact entered the road against the directions and warnings of the signage.
·Having entered the road and reached a section of roadway which clearly was available to be travelled in both directions on the correct side of the road, Mr Mauro Aurora was not given adequate warning or direction in order to avoid the hazard.
·Street lighting available in the street was clearly inadequate to illuminate any hazard within the street, other than if that hazard had been immediately adjacent to or under the light.
·The fact that 6 bollards, a Temporary Hazard Marker (T5-5) and a more substantial mesh fence formed with star droppers and safety mesh were put in place adjacent to the excavation immediately after the accident indicates that there has been recognition by Leed Construction that the hazard was significantly unprotected and needed greater definition to protect road users.
·If continuous protection had not been provided in accordance with the traffic management plan dated the 23rd February 2004, then at least the isolated site should have been treated in accordance with AS1742.3 and the Field Guide for Traffic Control at Works on Roads, with appropriate safety barriers, signage, transition, bollards, bunting, and possibly flashing lights (associated with the signing) to alert a driver to the presence of the hazard and to guide them away from it.
·If bollards had been placed at close spacing along the edge of the overall construction site as indicated on the traffic management sketch (Eastern Parade through to Kapara Road), it is unlikely that Mr Aurora would have crashed into the excavation. This therefore would have prevented injury to him as a result of his vehicle crashing into the side of the excavation and then toppling into it.[33]
[33] Exhibit P5
Mr Scragg took further instructions from the defendant on 11 March 2006[34] regarding a plan drawn up by the defendant about two or three months after the accident. Mr Scragg was concerned that the depiction of distances in particular was wrong and differed from the original instructions of the defendant.
[34] Exhibit P19
Mr Scragg wrote to the solicitors for Leed Engineering on 30 August 2006 in response to earlier correspondence from them. He set out in detail the physical and psychological injuries the defendant said he had sustained in the motor vehicle accident and the consequential loss of earning capacity and compromise to his enjoyment of life.[35]
[35] Exhibit P23
He spoke to the defendant and his wife again on 2 November 2006[36] regarding the circumstances of the accident and the injuries the defendant said he had sustained in it. An expert report had been obtained and provided by the solicitors for Leed Engineering from the engineering firm, Tonkin Consulting. The report from Tonkin Consulting dated 24 October 2006 was predicated on different factual assumptions from that of the Maunsell report, which was based on the defendant’s instructions and those obtained from his wife. Mr Scragg said that he had followed up the discrepancies in the two reports by writing to Tonkin Consulting, but the issue remained unresolved.
[36] Exhibit P15
In the file note of 2 November 2006, Mr Scragg noted that he had advised the defendant that one of the important issues in the case was whether or not the defendant’s evidence and that of his wife about the condition of the road works would be accepted by the court at trial. He said that if it were not believed, the defendant would have a real problem with liability.
No offers to settle the action were made by Leed Engineering until January 2007, when an offer was made in the sum of $20,000 or 20% of damages to be assessed. A formal offer to consent to judgment for 20% of Mr Aurora’s damages to be assessed was filed on 13 February 2007. On the same day Leed Engineering also filed an offer to consent to judgment in the sum of $20,000 in satisfaction of Mr Aurora’s claim. Copies of the two filed offers to consent to judgment were sent by letter to the defendant on 16 March 2007.[37]
[37] Exhibits P8 and P9
Mr Scragg said that at the time the first offer to settle was communicated by telephone, in January 2007, he believed he would have told the defendant that based on the defendant’s instructions as to his economic loss, he estimated the quantum of his damages to be in the order of $200,000. He said the estimate did not take into account considerations of any contribution for which the defendant might be found responsible, which he had discussed with the defendant from the outset.
Mr Scragg said that by March 2007 he was beginning to have concerns about conflicting or inconsistent instructions he was being given by the defendant. He had also had an opportunity to see Dr Monfries’ notes, obtained on subpoena, which suggested that some aspects of the defendant’s medical condition, relied on as a basis for damages had, contrary to the instructions from the defendant, existed before the accident on 27 March 2004.[38]
[38] Exhibit P16
By reference to costs entries and a file note[39] to refresh his memory, Mr Scragg was able to say that he telephoned the defendant’s home and spoke to Mrs Aurora about the offers of compromise. The defendant returned the call on 19 March 2007 and an appointment was made for the following day. Mr Scragg spoke to the defendant about the two filed offers to consent to judgment during the course of the attendance on 20 March 2007. He advised him of the costs risks associated with litigation and discussed with him further the issue of establishing the liability of the defendant in the personal injury claim. A further statement of just over three pages was taken from the defendant to clarify his instructions about the circumstances of the accident and details of a plan he had prepared earlier of the layout of the road where the accident had occurred.[40]
[39] Exhibits P10, P11 and P12
[40] Exhibit P12
When the defendant saw Dr Le Page on 29 March 2007, he told him that the more he looked at the photographs of the accident, the more upset he became because the other side was trying to say there were plenty of warnings to make him appear the guilty one. He said he was terrified that he would be found negligent and blamed for the accident.[41]
[41] Exhibit P4 pp 9-10
Solicitors for Leed Engineering filed two further offers to consent to judgment on 16 April 2007 – one for the sum of $29,500 excluding costs and the other for 30% of damages to be assessed. They were sent by the plaintiff to the defendant by letter dated 17 April 2007. Mr Scragg discussed the offers with the defendant on 18 April 2007.
It was Mr Scragg’s recollection that the defendant was upset about the offers filed in February and in April 2007 and was dismissive of them. Mr Scragg said that he recalled telling the defendant there were two reasons for the offers being low. One reason was a reflection of the perception of the solicitors acting for Leed Engineering of the limitations to the liability of Leed Engineering and the other was a possible perception of the defendant’s earning capacity as being in any event limited at the time of the accident, taking into account his age, health and other circumstances, reflected in medical reports obtained by solicitors for Leed Engineering. Mr Scragg was unable to say certainly whether the particular conversation he recalled about the possible reasons for the offers being low took place on 20 March 2007, after the offers filed in February 2007, or on 18 April 2007, after the offers filed in April 2007, or whether there were conversations along the same lines on both of those two occasions.
Mr Scragg identified a cost entry for 18 April 2007 which he completed in his own handwriting at the time of the twenty-minute telephone attendance on the defendant in which the filed offers were discussed. He remembered discussing the offers with the defendant, but he had no independent recollection of giving advice. The notes he made on 18 April 2007 were as follows:
discussed offers
- do recommend acceptance
instructed
-
agreedto rejectneed to follow up Dr C(ohen)
has diary
need to discuss
- is going to see Dr M(onfries)
- Dr Le Page’s comments
The defendant instructed Mr Scragg to reject the filed offers. Mr Scragg recalled that the defendant was absolutely fixed in his instructions to reject the offers - he had a perception of what he wanted - and all Mr Scragg had been called upon to do was to explain why Leed Engineering might have made the offers they did. Mr Scragg said he had not been called upon to advise whether or not the quantum of the offers was appropriate. He said that he had advised the defendant of the risks associated with rejecting a filed offer, although no note of it exists. Mr Scragg said that the fact that he had struck out the word ‘agreed’ and replaced it with ‘instructed’ reflected an endeavour on his part to obtain precision in relation to the fact it was the defendant’s instructions to reject the offers and not his recommendation.[42]
[42] T 55-56
Mr Scragg said that at the time the pleadings were drawn, the cost entry he completed for 18 April 2007 had not come to his attention. It was the plaintiff’s practice to keep cost entries, once they had been entered for the purposes of sending accounts, in a separate filing cabinet with cost entries for every other client. They were not kept on the separate individual client files. As a result, the cost entry notes in relation to the defendant’s file were overlooked at the time discovery was made and not identified until shortly before trial.
Mr Scragg denied that he had advised the defendant that there was no reasonable possibility that he would fail to prove liability in his claim against Leed Engineering or obtain an award of damages. He denied that he had told the defendant that the defendant would not be liable for costs.
The trial in the personal injury claim commenced on 7 May 2007. Mr Scragg appeared as counsel for Mr Aurora, who gave evidence. It appears from the transcript[43] that Mr Aurora became argumentative during his cross-examination by counsel for Leed Engineering. An issue arose regarding inconsistencies in his evidence and his original instructions to Mr Scragg. Mr Scragg was faced with the possibility of being subpoenaed to give evidence and he was unable to continue as Mr Aurora’s counsel. On 10 May 2007, he sought leave to withdraw as counsel. The trial was adjourned to 21 May 2007. Independent counsel was briefed to appear at short notice and cross-examination of Mr Aurora continued. By reference to the transcript of the trial it appears that the truthfulness of Mr Aurora’s evidence continued to come under challenge.[44] On 22 May 2007, after the conclusion of his cross-examination, during which film of Mr Aurora was shown to the court, negotiations to settle the matter were undertaken.
[43] Exhibit P20, e.g., pp129, 131, 159, 189
[44] Exhibit P20, see for example T331 and following
The advice of counsel to Mr Aurora was that his credibility had been shaken to the extent he was unlikely to be believed. Mr Aurora provided written instructions dated 22 May 2007 to settle the action on the best possible terms.[45] His instructions were for an offer to be made at first on his behalf to settle the action in the sum of $25,000 inclusive of his legal costs and interest and that he wished to be consulted before an offer of less than $20,000 inclusive of legal costs and interest was accepted. On 23 May 2007, Mr Aurora signed written instructions that he accepted an offer made on behalf of Leed Engineering ‘on a walk away basis without an order for costs’.[46]
[45] Exhibit P21
[46] Exhibit P21
On the morning of 23 May 2007 the court was advised that the parties had reached a compromise. By consent, the personal injury claim against Leed Engineering was dismissed with no order made as to costs.
Accounts were rendered by the plaintiff to the defendant between 31 March 2004 and 30 June 2007 in accordance with the costs agreement on a monthly basis. At the bottom of each monthly account was the following statement:
Please note that if this account relates to an injury compensation claim, it is provided for records purposes only at present. Payment of the account will be required at the finalisation of your matter or upon receipt of compensation, whichever occurs first.
It is not necessary or appropriate to make any assessment of quantum at this stage of the proceedings, but it is relevant to understand the notice the defendant had of the costs associated with his personal injury claim, as the claim proceeded, by the rendering of accounts to the defendant as follows:
Date of Account Rendered Amount 31 March 2004 $905.90 30 April 2004 to 31 January 2005 Cumulative Total 30 April 2004 $961.45 31 May 2004 $971.45 31 July 2004 $1099.65 31 August 2004 $1590.35 30 September 2004 $2750.45 24 October 2004 $3043.05 30 November 2004 $3203.75 31 January 2005 $4615.15 (total costs to date of account) Monthly statements Fees for the month only 28 February 2005 $427.52 31 March 2005 $739.40 30 April 2005 $1248.44 31 May 2005 $830.50 30 June 2005 $1711.41 31 July 2005 $138.16 31 August 2005 $253.61 30 September 2005 $479.11 31 October 2005 $89.21 30 November 2005 $1639.56 31 January 2006 $2610.47 28 February 2006 $322.31 31 March 2006 $2898.67 30 April 2006 $2444.53 1 June 2006 $1.82 30 June 2006 $800.80 31 July 2006 $116.71 31 August 2006 $1236.07 30 September 2006 $314.66 31 October 2006 $55.61 30 November 2006 $1274.08 31 January 2007 $1793.06 28 February 2007 $1036.64 31 March 2007 $2942.83 30 April 2007 $5172.31 31 May 2007 $17813.02 30 June 2007 $67.21
There are some details of the accounts which are relevant to the issue of liability. First, I accept without qualification the authenticity of the bundle of cost entries for the month of April 2007[47] as original and contemporaneous records of the plaintiff. The cost entries have the appearance of original documents and the entries correspond exactly with both the draft account and the actual account rendered on 30 April 2007.
[47] Exhibit P31
There is no basis for the suggestion that the cost entry for 18 April 2007 was recently fabricated. The suggestion is entirely rejected. I accept that the evidence of Mr Scragg that the cost entry was made by him on 18 April 2007 and that it is a contemporaneous and accurate, if brief, note of his conversation with the defendant on the telephone - a conversation over twenty minutes during which he discussed with the defendant the offers to consent to judgment filed by Leed Engineering in the personal injury claim.
I accept Mr Scragg’s evidence that he had in mind the concerns on liability and quantum he had already discussed with the defendant and that he now has no independent recollection of giving the advice. His note that he recommended acceptance of offers of compromise should in my opinion be accepted as an accurate reflection of his advice to the defendant.
Secondly, the cost entries set out in each account reflect the scope and nature of the work undertaken by the plaintiff on behalf of the defendant in prosecuting his personal injury claim and that the work proceeded in a professional manner. No criticism has been made on behalf of the defendant of the performance of the work generally and without making any finding in relation to the reasonableness of any particular item, in my opinion, no criticism could be made that the work was not appropriately performed.
There was correspondence from the plaintiff to the defendant on 6 June 2007, 31 July 2007 and 14 August 2007[48] in an attempt to obtain remuneration for the work done by the plaintiff on his behalf and the payment of experts’ and counsel fees. The defendant’s wife advised that she was attempting to arrange a bank loan. The defendant was advised that he might obtain a waiver of court fees if his financial circumstances warranted it.
[48] Exhibit P22
The letter to the defendant dated 14 August 2007 refers to correspondence received from the defendant’s daughter, unsuccessful attempts to communicate with the defendant and his daughter and to the prospect of recovery proceedings in the absence of a resolution of the outstanding fees issue.
Solicitors instructed by Ms Emilia Aurora on behalf of the defendant wrote to the plaintiff by letter dated 21 August 2007[49] advising that Ms Aurora had obtained a waiver of court fees, including the cost of the trial transcript and that:
Beyond that, Mr Aurora has no capacity to pay the balance of your account. He holds no property against which he could borrow, has no other assets and exists on a disability pension.
[49] Exhibit P24
A subsequent search of the certificate of title in respect of property owned by the defendant and his wife at North Haven showed that pursuant to an order made in the Family Court of Australia in July 2007, the defendant’s interest in it had been transferred to his wife.
No payment has been received by the plaintiff for the work done for the defendant in respect of the personal injury claim.
Apart from outstanding disbursements in the matter, there appear also to be costs for which the defendant is liable to SA Water and the Department of Transport Energy and Infrastructure[50] as a result of the proceedings issued on the defendant’s behalf in District Court Action No 2083 of 2005.[51]
[50] The subject of investigation by the plaintiff in May 2005 – see Exhibits D26, D27
[51] Exhibit P7
These proceedings were instituted on 31 August 2007.
The defendant’s case
The only witness called by the defendant in relation to the issues in the action was Mrs Joan Aurora.
Mrs Aurora described herself as the plaintiff’s ex-wife. She said they were separated but not divorced. She agreed that she had attended the Family Court after May 2007 and that an order had been made by consent that the defendant transfer his interest in their house to her. She said that is what the defendant had wanted. He had remained living in the house for some time after that, before moving to live elsewhere.
Mrs Aurora said she could remember attending with her husband to see Mr Scragg on occasions - in November 2006 and about a week before trial in around May 2007. She remembered that Mr Scragg had asked her questions and taken a statement from her about the way the motor vehicle accident had happened. Mrs Aurora agreed that she had read a statement given by her husband in relation to the consequent disability he had suffered. She had agreed to make corrections if she saw something which she thought was wrong, although she had not made a correction to at least one factual matter which to her knowledge was untrue.[52]
[52] T158
She understood that the defendant in the personal injury claim had obtained its own expert report which was contrary to the opinion obtained on behalf of the defendant and that liability was not agreed. She said she did not remember Mr Scragg saying that if the description of the accident site given by the defendant were not believed, there would be a problem with liability. She did not hear her husband receive any advice from Mr Scragg about his prospects of success, nor did Mr Scragg give her any advice about her husband’s prospects of success in the litigation, or risks associated with it. She said she had a very short discussion with the defendant about the offers to settle his action.
Mrs Aurora was determined to say that the defendant had told her that Mr Scragg had said not to worry because he had no problems with his claim. That part of her evidence was inadmissible as hearsay, inconsistent with other uncontradicted evidence and inherently unreliable. I have disregarded it.
An application to call the defendant, made during the course of the address by the defendant’s counsel, was refused. I had been told that a decision not to call the defendant had been made by counsel before the trial began. The decision was based on the assessment of the defendant by Dr Schultz, who was called by the defendant in order to avoid any criticism for the defendant’s failure to give evidence. The plaintiff had conducted its case on that basis. In my opinion, having regard to the medical evidence called by the defendant at the outset of the case, no reliance could be placed on any evidence given by the defendant.
A copy of two pages of the Rules of Professional Conduct and Practice adopted by the Law Society of South Australia was tendered by the defendant.[53] The rules on which the defendant relies are rule 12.1 and 12.2 and rule 41.2(a) and (b), which provide as follows:
12.1A practitioner must seek to assist the client to understand the issues in the case and the client’s possible rights and obligations, if the practitioner is instructed to give advice on any such matter, sufficiently to permit the client to give proper instructions, particularly in connection with any compromise of the case.
12.2A practitioner must where appropriate inform the client about the reasonably available alternatives to fully contested adjudication of the case unless the practitioner believes on reasonable grounds that the client already has such an understanding of those alternatives as to permit the client to make decisions about the client’s best interests in relation to the litigation.
41.2Without limiting sub-rule 41.1 the practitioner shall unless it is unreasonable or inappropriate in the circumstances so to do:
(a)as soon as practicable after first taking instructions from a client provide to the client written advice as to the reasonably estimated range of costs and disbursements the client may incur by pursuing the legal activity and the method of calculation of those costs;
(b)provide to the client as soon as practicable after taking instructions written advice as to the basis upon which the practitioner accepts the client’s retainer and in particular setting out the basis upon which the practitioner intends to charge the client for the services rendered and the current rates that apply to such charges; provided that such advice will not be required where there exists an applicable prior agreement by which all work done by the solicitor for that client or all work of a certain kind is subject to an agreed charging rate.
[53] Exhibit D34
Conclusion
There is no dispute that the plaintiff owed to the defendant a concurrent duty in both contract and tort to take reasonable care in the provision of services to him and the defendant has the right to assert the cause of action that appears to be the most advantageous to him in respect of any particular legal consequence.[54]
[54] Astley v Austrust Ltd (1999) 197 CLR 1 at 22-23
No expert evidence was called by either party. The extract from the Rules of Professional Conduct and Practice tendered by the defendant prescribe only in very general terms a standard determined by the Law Society of South Australia, following model rules originally promulgated by the Law Council of Australia in 1997 and revised in 2002.
The standard of care and skill expected of the plaintiff’s employed solicitor, Mr Scragg, is that which may be reasonably expected of practitioners with comparable training and experience.[55] It remains for the court to determine what is the appropriate standard of care and whether, in this case, the relevant professional services were provided and professional advice was given consistently with or in breach of that standard.[56]
[55] Heydon v NRMA Ltd (2000) 51 NSWLR 1 at 52-53
Sections 40 and 41 of the Civil Liability Act 1936 came into operation on 1 May 2004, after the motor vehicle accident of the defendant. The provisions in my opinion make no difference in this case in any event to the standard of care to be applied.
[56] Heydon v NRMA Ltd, above, at 55-56; Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 at 654; Midland Bank Trust Co Ltd. and another v Hett, Stubbs & Kemp (a firm) [1979] Ch 384 at 402
Conduct of the personal injury claim itself
In my opinion, there is no basis for concluding that the proceedings should not have been issued at all. The defendant claimed that he had been wronged. He sought to have the wrong vindicated. He could expect that Mr Scragg would conduct his litigation with a view, consistently with his duty to the court, to putting his case as instructed.[57]
[57] White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 231
There is no suggestion on the pleadings or on the evidence that the proceedings issued in the personal injury claim on behalf of the defendant failed properly to reflect the instructions the defendant gave to Mr Scragg.
There is no criticism raised on the pleadings, or arising from the evidence, of the work done by the plaintiff in the conduct of the personal injury claim itself.
Advice
It is not disputed by the plaintiff that the defendant was given advice that damages to which he might be entitled in his personal injury claim could be in the order of $200,000, including an amount for his loss of earning capacity resulting from the disability said to have been caused by the motor vehicle accident of 27 March 2004. There is no suggestion either on the pleadings or on the evidence that the advice was inappropriate or wrong at the time it was given.
There is no evidence that the defendant was given a guarantee that his claim for damages would be successful, nor that he was given a guarantee that he would not have to pay legal costs, either to his own solicitors or to those acting for other parties to the action.
There is no evidence that the defendant was advised that there was no reasonable possibility that he would fail to prove liability and/or obtain an award of damages or that he would therefore not be liable to the plaintiff or to Leed Engineering for any for costs in the personal injury claim.
On the contrary, the evidence is that Mr Scragg had advised the defendant about the importance of establishing the facts relied on by the defendant and of obtaining an expert opinion to support his claim.
The defendant must have known at an early stage of the proceedings that he would have to establish liability against the party he claimed was responsible for his accident. In April 2004 the defendant told his general medical practitioner that he was ‘unable to claim third party’ as there was no other motor vehicle involved in his accident and he would have to try to claim against the road builders.
As early as 15 September 2004, the defendant told Dr Le Page that he had been particularly restless after he had been asked by his solicitor to draw a plan of the scene of the accident. He said that the more that he looked at photographs of the accident scene, the more upset he became, ‘because the other side was trying to say that there were plenty of warnings to make him appear as though he is the guilty one.’
On several occasions, including on 11 March 2006, 2 November 2006 and 20 March 2007, Mr Scragg took the defendant and his wife through the instructions regarding the circumstances of the motor vehicle accident and the plan the defendant had drawn. In November 2005, the defendant was asked to attend the meeting with the expert engineer, Mr Verco, from Maunsell Australia Pty Ltd. The defendant was asked to check and sign the record of his instructions of 11 March 2006.
The defendant must also have known of the conflict between his version of the state of the accident site and how the accident occurred, on which the expert instructed on his behalf relied for his opinion, and the description of the road works and warning signs and expert opinion relied on by Leed Engineering.
On 2 November 2006, in discussing the report obtained on behalf of Leed Engineering from Tonkin Consulting, Mr Scragg advised the defendant that if the court did not accept his evidence and that of his wife, there would be a problem with establishing liability against Leed Engineering.
On 27 March 2007, a week after discussing the first filed offers with Mr Scragg and three weeks before his conversation with Mr Scragg about the second filed offers, the defendant told Dr Le Page about disturbing dreams he had experienced about five weeks beforehand, as a result of information from his solicitor about an offer from the insurance company. The defendant presented to Dr Le Page on that occasion as ‘extremely vulnerable to any communications about his legal case, and although he believes that his account as to what happened is true, he is terrified that the insurance company will blame him for the accident, find him negligent, because they have presumably already said he is in the wrong.’
Filed offers to consent to judgment
There is no basis for the assertion made on behalf of the defendant that competent and professional legal advice would have been that the defendant should accept the filed offers to consent to judgment, or any of them. As Debelle J said in Hall and others v Foong:[58]
It is important that the court does not allow hindsight to insinuate itself into its reasoning. Hindsight is no doubt useful in other contexts but, as a general rule, it must be avoided when determining liability. As Megarry J observed in Duchess of Argyll v Beuselinck [1972] 2 Lloyds LR 172 at 185:
In this world there are few things that could not have been better done if done with hindsight. The advantages of hindsight include the benefit of having a sufficient indication of which of the many factors present are important and which are unimportant. But hindsight is no touchstone of negligence. The standard of care to be expected of a professional man must be based on events as they occur, in prospect and not in retrospect.
In addition, it is not possible to identify one course only as being the proper advice to be given by the defendant to his client. Opinions will differ as to what was the most appropriate advice. I do not think a court could fairly conclude that the defendant had been negligent if he had advised either of the first two options or even if both had been discussed and a choice made between them. Advice of this kind involved an exercise of judgment. A solicitor is not guilty of negligence merely because he has committed an error of judgment unless that error is grossly made: Faithfull v Kesteven (1910) 103 LT 56; Fletcher & Son v Jubb [1920] 1 KB 275; Duchess of Argyll v Beuselinck.
[58] (1995) 65 SASR 281 at 304
Mr Scragg discussed with the defendant the possible reasons for the offers to consent to judgment being low, in particular on account of the view taken by the solicitors acting for Leed Engineering on liability for the accident and on the extent of the plaintiff’s consequent disability.
It is the case that Mr Scragg had by March 2007 begun to entertain some concerns about the reliability of the defendant’s evidence regarding the circumstances of the accident. But there is no basis for the assertion that the defendant was not appropriately advised about the risk of his being found negligent. The defendant lost no opportunity of accepting any offer to consent to judgment on that account. The defendant was aware of the legal risks associated with establishing liability against Leed Engineering in the proceedings. He was in possession of the facts of the circumstances of his accident. He knew that it was alleged that his driving had been negligent.
Mr Scragg had also seen the medical records produced from the defendant’s general medical practitioner, which appeared to be in conflict with instructions given by the defendant. Mr Scragg addressed those concerns with the defendant.
The defendant must have appreciated that he had to establish that the disability for which he was seeking damages in his personal injury claim had to be shown to have arisen or to have been aggravated as a result of his accident. The defendant was involved in trying to obtain his medical records from his general medical practitioner to help to establish the disability arising from the motor vehicle accident. The defendant gave Mr Scragg detailed statements regarding his injuries and the effect of his injuries on his ability to work. Mrs Aurora gave a statement as well and she agreed to check the details given by the defendant. In July 2004, the defendant had told his general medical practitioner that he was off work as a result of injuries sustained in the motor vehicle accident and that he felt it had aggravated his condition of diabetes. He said he would like an opinion that his diabetes was aggravated by stress. It appears from the medical records that his doctor told him that he was unsure that stress was the cause of elevated blood sugar levels. In September 2004, the defendant told his doctor he was upset that he had to pay for medical opinions regarding his accident. The defendant was aware of the need to establish the extent of any disability consequent on the motor vehicle accident.
It is now possible to infer with the benefit of hindsight, as a result of evidence presented at the trial in May 2007, that by the time the offers to consent to judgment were filed the solicitors acting for Leed Engineering might have obtained film or other evidence potentially capable of compromising the defendant’s account of his injuries and the disability for which he was claiming damages.
In my opinion, it was appropriate for Mr Scragg in advising the defendant to have regard to the circumstances of the motor vehicle accident as described by the defendant to him, the expert report obtained Mr Verco, Maunsell Australia Pty Ltd, and the defendant’s resulting disability, as described by the defendant to him, as well as concerns in relation to liability and quantum of damages. It was in my opinion appropriate to discuss the offers filed by Leed Engineering with the defendant, as he did, and appropriate to recommend to the defendant, as he did, the acceptance of offers to consent to judgment filed on 16 April 2007.
The nature and scope of the duty of lawyers to exercise reasonable care, particularly when litigation is in prospect or being, must be assessed in the knowledge that litigation always involves some uncertainties. Litigants will frequently be disappointed by the outcome. Peoples’ expectations will often exceed their entitlements.[59]
[59] Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 at 272
As Callinan J said in a different context, in D’Orta-Ekenaike v Victoria Legal Aid and another[60], litigation is adversarial. It involves the practitioner in presenting the facts and the law in the best possible light for a client. It is not possible to be certain at the beginning how the facts will fall out at trial. The conduct of a solicitor is to be judged as at the time of the alleged breach and not by a consideration of the way events later evolved.[61]
[60] (2005) 223 CLR 1 at 114
[61] Capital Brake Service Pty Ltd v Sparke Helmore [2003] NSWCA 225
Mr Scragg had a duty to warn the defendant of a material risk inherent in the litigation, that is, in the circumstances of the particular case, a risk to which a reasonable person in the defendant's position, if warned of the risk, would be likely to attach significance.[62] The evidence is that he had done so.
[62] Rogers v Whittaker (1992) 175 CLR 479; Capital Brake Service Pty Ltd v Sparke Helmore, above
A compromise in litigation, whether wise or unwise in the client’s interests, is a matter for the client to decide in the exercise of his own judgment, formed in appreciation of advice given to him. It is not the function of the legal adviser to coerce the client into settlement. There was not and could not have been, in the circumstances as they were understood at the time, any obligation on Mr Scragg, in the face of instructions he had received from the defendant and the defendant’s expressed dissatisfaction about the adequacy of the filed offers, to seek to persuade the defendant to compromise his claim.[63]
[63] Studer v Boettcher [2000] NSWCA 263; Harvey v Phillips and another (1956) 95 CLR 235 at 242
There is no evidence that the defendant was advised by Mr Scragg to reject any of the offers to consent to judgment, or that he relied on such advice given by Mr Scragg.
There is no evidence that the plaintiff was in breach of the contract with the defendant and there is no evidence that the plaintiff was negligent in the provision of professional services to the defendant. It follows from the defendant’s failure to establish a breach of a term of the contract with the plaintiff or a breach of the standard of care expected of the plaintiff in providing professional services to the defendant, the defence raised by the defendant to the plaintiff’s claim cannot be maintained and the counterclaim must fail on that account as well.
Causation
In order to succeed in his claim and recover damages other than nominal damages, the defendant had to prove not only that the plaintiff’s employee, Mr Scragg, acted negligently, but also that his negligence caused the defendant’s loss. The defendant had to prove that the plaintiff was negligent in failing to advise him to accept filed offers, and, on the balance of probabilities, that he would have acted differently if properly advised. [64]
[64] Micarone and others v Perpetual Trustees Australia Limited and others (1999) 75 SASR 1 at 147; Hall and others v Foong (1995) 65 SASR 281 at 292, 301
There is no evidence that the defendant would have considered advice to accept offers to consent to judgment, as is alleged in the pleadings. There is no evidence that had he been so advised he would have accepted any one of the offers to consent to judgment. In the absence of direct evidence, the court may have regard to any contemporaneous facts or documents which might assist in determining how the defendant might have acted.[65]
[65] Micarone and others v Perpetual Trustees Australia Limited and others, above; Hall and others v Foong, above
Leaving to one side the fact that the defendant has not shown that he was not properly advised, in my opinion in this case the evidence in any event does not allow for an inference that the defendant, if properly advised, would have acted any differently, that is, that he would have accepted a filed offer to consent to judgment in his personal injury claim.
The evidence, in my opinion, all points the other way. The uncontradicted evidence is that the defendant was dismissive of the offers which had been filed on behalf of Leed Engineering. In spite of Mr Scragg’s recommending that he accept an offer of settlement, he instructed Mr Scragg to reject offers to consent to judgment filed on 16 April 2007. The defendant was determined to proceed to trial.
There is no dispute that at trial, the defendant’s credit was so impugned the matter was settled on the defendant’s instructions, after advice of independent counsel, with an order dismissing his action, with no order as to costs.
It is open to infer from the way the subsequent trial unfolded that the defendant had not been entirely frank with Mr Scragg. The defendant was the person in possession of the relevant information and in the absence of any reason to reject the instructions given to him by the defendant, Mr Scragg cannot be criticised for relying on them.
There is no evidence in any event as to which of the four offers to consent to judgment the defendant would have accepted, that is, whether he would have accepted the February or the April offers, or whether he would have accepted an offer to accept a sum of money, or an offer to accept liability for a percentage of his damages, to be assessed. It can be inferred that in any assessment of damages in the personal injury claim, the defendant’s credit was likely to have been impugned as it was at trial. Even if the defendant had established negligence against the plaintiff, which he has not, and even if the defendant had established that he would have acted differently by accepting a filed offer to consent to judgment, which he has not, the court cannot be asked to select, without the benefit of any evidence from the defendant at all, which of the offers the defendant might have accepted.
The defendant has not only failed to establish any basis for the counterclaim against the plaintiff, but he has also failed to establish that he has suffered any loss as a result of the way in which his personal injury claim was conducted by the plaintiff. The counterclaim is dismissed.
The defendant is liable to pay the plaintiff for the work the plaintiff did on his behalf in the personal injury claim. An adjournment will be granted to allow the plaintiff to present a bill of costs and for the defendant if so advised to apply pursuant to section 42 of the Legal Practitioners Act 1981 for the taxation of the bill for those costs.
The plaintiff is entitled to judgment in due course for the amount of the bill as agreed or as certified on taxation. If the defendant does not apply for taxation within the period of the adjournment, the plaintiff is entitled to treat that as acceptance of the correctness of the bill and sufficient evidence that it is a reasonable and proper bill.[66]
[66] King William Law Chambers and another v Mobitel (International) Pty Ltd (1981) 29 SASR 316 at 319-320
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