Melina Sehr v Best Hooper Ltd (ACN 137 307 692)
[2015] VMC 32
•13 JULY 2015
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION No D 13792554
BETWEEN:
MELINA SEHR
Plaintiff
- and -
BEST HOOPER PTY LTD (ACN 137 307 692)
Defendant
MAGISTRATE: ROBINSON
WHERE HEARD: MELBOURNE
DATE OF DECISION: 13 JULY 2015
MEDIUM NEUTRAL CITATION: [2015] VMC032
REASONS FOR DECISION
APPEARANCES: Counsel Solicitor
For the Plaintiff Mr Ribbands Defteros Lawyers
For the Defendant Mr Sedal Obst Legal
HIS HONOUR:
Introduction
This is an action brought by Ms Melina Sehr to recover damages which she says were caused by the negligence of Best Hooper Pty Ltd (“Best Hooper”), a firm of solicitors, which she retained to represent her in the Supreme Court in an appeal against a decision of the Victorian Civil and Administrative Tribunal (“VCAT”).[1]
[1] Ms Sehr’s former husband appears also to have engaged, jointly with Ms Sehr, Best Hooper. But he has not been a party to this proceeding and no point was taken by the defendant about this. Given that he has taken no part in this proceeding, I refer only to Ms Sehr’s participation in the proceedings in VCAT, the Supreme Court and in this Court.
For the reasons that follow, I would dismiss the claim.
Background
In 2008, Ms Sehr and her husband became concerned with their son’s schooling at Christ Church Grammar (“the school”) and, having raised these concerns with the school, were not satisfied with its response. They decided to move him to another school. To that end, early in the fourth term of 2008 they gave the school notice that their son would not be returning in 2009.
Under the agreement governing their son’s enrolment there was a clause which required “a minimum of a term’s notice … prior to the permanent or temporary withdrawal of a student from the School.” If that minimum notice was not given, then a term’s fees (in the amount of $3,268) would be payable. Since Ms Sehr had not given notice by the end of term 3, which was required to meet the minimum notice period, the school issued an invoice for fees for term 1 of the following year.
Aggrieved by this, Ms Sehr applied, successfully, to VCAT for a declaration that she was not indebted to the school for those fees. The school then appealed to the Supreme Court against that decision. Ms Sehr engaged Best Hooper to act for her and was given advice, by Mr Robinson, a solicitor of that firm, about costs that she might have to pay and the possibility of those costs being covered, at least partially, by the Appeal Costs Fund. Mr Robinson’s advice was to the effect that Ms Sehr’s out-of-pocket expenses would not exceed $1,000. This was contingent, however, on his estimate of the school’s costs, combined with Ms Sehr’s costs, being met largely by the payment of $50,000 from the Appeal Costs Fund.
The school prevailed in the appeal and Ms Sehr was ordered to pay its costs but was granted a certificate entitling her to claim against the Appeal Costs Fund.
The school sought costs in an amount which far exceeded Mr Robinson’s estimate. At this stage, Ms Sehr lost confidence in Mr Robinson and engaged Defteros Lawyers to represent her.
Ms Sehr says that:
(a) Best Hooper’s advice (delivered by Mr Robinson) about costs was negligent; and
(b) that Best Hooper was negligent in (Mr Robinson) not submitting an application to the Appeal Costs Board (“the Board”) in time.
Flowing from those two allegations of negligence, Ms Sehr says:
(a) had she received proper advice about her potential exposure to costs, she would not have defended the appeal and incurred the legal costs she did; and
(b) she would not have incurred, unnecessarily, additional costs with Defteros Lawyers in making an application to the Board for her application to be considered out-of-time.
Evidence
The parties tendered jointly a large number of documents, most of which was correspondence between, variously, Ms Sehr and Mr Robinson, the solicitors for the school, the Appeal Costs Board, and Defteros Lawyers.
Ms Sehr gave evidence and explained that, while she represented herself in VCAT, upon the matter going to the Supreme Court she considered that she required professional assistance. On the recommendation of a friend, she engaged Best Hooper in late January 2009.
At around the same time she also consulted a friend, Mr Richard Kendall QC, and provided him with a copy of the VCAT decision. Mr Kendall advised her that the decision of VCAT was erroneous and encouraged her to seek a negotiated settlement with the school.
Best Hooper’s Advice
Ms Sehr said that in an initial conference, or two initial conferences, with Mr Robinson, he said that he thought that she would succeed in defending the appeal but, in the event that she did not, she would be entitled to a certificate allowing her to draw on the Appeal Costs Fund to a maximum amount of $50,000. Further, to the extent that costs might be awarded against her in favour of the school, any such costs would be commensurate with the size of the claim, ie, $3,268. Mr Robinson explained, by way of example, that the school could not engage an extravagantly large and expensive legal team and recover all the costs of doing so. Ms Sehr recalled that Mr Robinson advised her that any out of pocket costs would be “no more than $1,000”.
Ms Sehr said that, had she be advised that costs awarded against her could have been “indeterminate” rather than “no more than $1,000”, then she would have instructed Best Hooper to pay the disputed fees.
On 1 February 2009, Mr Robinson wrote to Ms Sehr to confirm his advice in writing. Drawing only on the relevant parts, he wrote:
We confirm that the school is “on a hiding to nothing”. If they lose the appeal, this will not only set a precedent they may wish to avoid, but they will have to pay your costs. In [an earlier appeal in the Supreme Court which Mr Robinson was involved] … the costs were accepted by the Appeal Costs Board at over $25,000. In this case, they are likely to be in the range of $10,000 to $15,000.
However, if the school wins the appeal, then under ss. 4 and 5 of the Appeal Costs Act 1998, you are entitled to indemnity for the costs you have to pay the appellants [s. 5(1)(a)(i), and your own costs [s 5(1)(b)(i)], to a maximum of $50,000 (s. 5(2)]. As we indicate above, the combined costs of both sides are very unlikely to exceed $50,000.
…
We estimate that a difference between the value of any costs order, or indemnity certificate you obtain, will be no more than $1,000 than what your actual costs of engaging us will be.
Mr Robinson returned to the issue of costs in a section of the letter entitled “The amount in dispute”. There, he wrote that the “amount in dispute is less than $3,300. The costs involved in each side will be 3 to 5 times that amount.”
The remainder of the letter, which is 7 pages in length, discusses the merits of the school’s appeal and concludes: “in weighing up all these factors, we agree that the preponderance of issues comes down on your side.”
On 4 February 2010, Ms Sehr emailed Mr Robinson. Drawing again only on relevant parts, she wrote:
I would like to put an offer to CCGS ideally in the form of a Calderbank letter (I will take your advice on this) that we will not participate at all [original emphasis] in their leave for appeal application conditional on CCGS’s giving us a legally binding commitment that they will not seek or obtain an order for costs irrespective of the outcome or seek payment of the original debt ($3,268) … Our primary concern is to ensure we don’t want any costs awarded against us even though we have the Appeal Cost Fund to cover us.
Mr Robinson annotated that email with his comments in reply. Referring to the proposed Calderbank letter, he wrote:
1. We (you) consent to orders allowing the appeal, and remitting the case to VCAT for re-determination by a different member. No order for costs on either side.
2. The school promises that it will then agree to the proceeding being discontinued, so that there is never any decision or order on it.
3. In such an event, would you be prepared to pay any part of your costs, or insist that the school pay them? We suggest the latter.
On 10 February 2010 Mr Robinson sent a letter to the school’s solicitors proposing that the matter be resolved by, in summary, Ms Sehr consenting to the appeal being allowed and discontinuing the proceeding upon it being remitted to VCAT, but on the condition that the school pay Ms Sehr’s party/party costs and not pursue payment of the outstanding fees.
The school did not accept that offer. Mr Robinson then spoke to a solicitor acting for the school. Following that conversation, he reported by email to Ms Sehr on 22 February 2010 that “what stuck in the school’s craw was our request that they cover your costs.” Further, Mr Robinson wrote that he would not recommend any “settlement which involves you paying any money to the school … but it is a way of avoiding the stress you seem to feel about the matter.” He noted that the “decision is yours” and sought instructions.
Ms Sehr responded to that email by instructing that an offer was to be put which did not require the school to pay her costs. That offer was made by letter dated 23 February 2010, in similar terms to the offer dated 10 February 2010 save that it proposed that each party bear its own costs. It was proposed that the school also agree not to pursue the disputed fees.
That offer was also refused. Mr Robinson again telephoned the school’s solicitors and was told that they had been instructed to “press on” since it wanted “a ruling on the contractual effect of the provisions.”
With no settlement between the parties, the matter proceeded to be heard. The school briefed both senior and junior counsel. The appeal was allowed and the matter was remitted to VCAT.
The Issue of Costs
On 10 December 2010 costs orders were made providing that Ms Sehr pay the school’s costs and, also, that she be granted a certificate under section 4 of the Appeal Costs Act 1998.
On 31 May 2011 Mr Robinson wrote to the Secretary of the Board. He noted that the certificate was made “in respect of the appellants [the school] and [Ms Sehr’s] costs of the appeal”. Further, he wrote that “thus far, the appellant has not presented a bill of costs, nor made any demand for costs.” An application for the fees charged by Best Hooper was submitted, supported by a bill of costs in taxable form. Mr Robinson requested that the Secretary “advise the outcome of this part of the application” [my emphasis]. He concluded his letter by saying:
We note that the amount of money in dispute in this matter was less than $3,300; and that the appellant instructed senior counsel, as well as an experienced junior, even for the return date of the application for leave to appeal. In our respectful view, there was no justifiable basis for doing so, or for inflicting the additional cost involved by the engagement of senior counsel on the respondents, or on your fund. Therefore, if and when a bill in taxable form is presented, we propose to have it taxed, so that the Court can deal with this, and other objections we have to the extravagant way in which the appellant conducted its case.
On the Board’s application form Mr Robinson responded to the question “Has the Respondent Paid the Appellant?” with a “no” and further noted that “But no bill has been presented”. In response to “Total Amount Being Sought” Mr Robinson wrote “Before Appellant’s costs $23,999.11”.
On 9 June 2011, the Secretary of the Board wrote to Mr Robinson acknowledging receipt of the application. No reference was made to it being a partial application.
On 6 September 2011, Mr Robinson wrote to Ms Sehr advising that Best Hooper’s fees had been paid by the Board and noting that “So far, I have heard nothing from the School’s solicitors about the costs that will be claimed from that source. I have no intention of reminding them of their slackness.”
In the course of 2012, the parties engaged in discussions about costs, but no settlement was reached. On 23 April 2012, the school’s solicitors gave notice that they were instructed to prepare a bill in taxable form and apply for taxation. In response, on 30 April 2012, Mr Robinson wrote to the school’s solicitors proposing that, if the school agreed not to seek payment of more than $32,828.79 (that being the balance remaining of the $50,000 available under the certificate), then Ms Sehr would not oppose “any part of the costs claimed”. That offer was not accepted.
In late 2012, solicitors for the school served a summons for taxation of costs, claiming over $85,000 costs including around $50,000 for counsel’s fees.
Ms Sehr Engages Defteros Lawyers
Having been told that she would be liable for no more than $1,000 out-of-pocket expenses, and yet now faced with a demand by the school which would result in much more than that being paid, Ms Sehr became concerned with the quality of Best Hooper’s representation of her.
In early 2013, Ms Sehr engaged Defteros Lawyers to act for her. She recalled Mr Defteros calling her and advising her that the costs certificate had expired (after 12 months) and that “this is a disaster.” He advised that an application would need to be made to the Board to extend the time for an application to be made in respect of the school’s costs, as well as challenging the bill. Defteros Lawyers pursued that course and, in the process, engaged two different barristers. All up Defteros Lawyers charged Ms Sehr fees and disbursements in the amount of $28,869.15. This included costs incurred in making an application for an extension of time to claim from the Board in respect of the school’s costs.
In the end, Defteros Lawyers and the school’s solicitors agreed to resolve the matter on terms similar to those proposed by Mr Robinson in April the previous year – ie, with the school agreeing to Ms Sehr paying it only $30,000 (and thus being covered entirely, vis-à-vis the school, by the Appeal Costs Fund).
Mr Robinson’s Evidence
Mr Robinson said that he had worked as a solicitor for some number of decades and, in that time, had acted in around 40 to 50 appeals to the Supreme Court or the Court of Appeal on a question of law. Only five such matters had then gone to the High Court. In his experience, the usual outcome in such cases was that directions before an Associate Justice would take no longer than 30 minutes and the appeal itself would usually be heard in less than one day. In his experience, costs for such a matter would generally be around $25,000 in the appellant’s case, and $12-15,000 for the respondent. It was this experience which led him to advise Ms Sehr that the combined costs would be unlikely to exceed $50,000.
As to the Appeal Costs Fund, in his experience the Board required a bill in taxable form before making a payment. For that reason, since the school had not provided a bill in taxable form (or at all), he submitted only a bill in relation to Ms Sehr’s costs. He thought it was possible that the school would not pursue its costs. This had happened once in a case in which he had acted against a Water Board. He therefore saw no advantage in prompting the school to pursue its costs and, in any event, he had foreshadowed to the Board that the school had yet to present a bill and that the application was a “partial” one.
Mr Robinson said that Ms Sehr was “never” prepared to accept any arrangement involving her paying the disputed terms’ fees and the school’s costs.
In cross-examination, Mr Robinson agreed that certainties very rarely arise in litigation and that many unexpected exigencies may arise. In this case, the school’s claim against Ms Sehr for costs in the order of $85,000 was one such exigency. Whilst agreeing with that, however, Mr Robinson said that the school would never have been awarded $85,000 on a taxation and, in particular, senior counsel’s fees would not have been allowed.
Evidence of Jennifer Young
Best Hooper relied on an expert report of a costs consultant, Ms Jennifer Young. In essence, Ms Young’s evidence was that the legal costs of making an application to the Board for an extension of time to apply should be around $5,000 and possibly less if the work had been performed by a clerk. In cross-examination, Ms Young agreed that she had determined this estimate on the “standard basis” (or party/party) and that solicitor/client costs will usually exceed these.
Ms Sehr’s Claims Against Best Hooper
By a complaint dated 11 December 2013, Ms Sehr claimed the amount of $30,786.69 against Best Hooper, that amount consisting of:
(a) $28,869.69 representing “additional legal costs” incurred to apply to the Board for an extension of time to lodge, and the lodging thereafter of, an application for indemnity in respect of the school’s costs, and costs incurred in negotiating a “fair and reasonable amount of costs to be paid to the [school]”;
(b) interest forgone on the amount paid to the school until recovering that amount from the Board; and
(c) $1,500 costs paid to Best Hooper.
The complaint particularised 11 grounds of negligence. Four were not pressed at trial (including in relation to Mr Robinson’s advice on merits), leaving, in essence, the following allegations:
(a) Best Hooper negligently advised Ms Sehr that:
(i)the $50,000 maximum allowed for civil appeals under the Appeal Costs Act 1998 would suffice to cover both the school’s and Ms Sehr’s costs of the appeal; and
(ii)should the school be successful in the appeal, Ms Sehr would be no more than $1,000 out-of-pocket once the school’s and her costs were paid by the Board;
(b) following the resolution of the appeal Best Hooper applied to the Board only for Ms Sehr’s costs of the appeal within the (12 month) time limit stipulated in the Appeal Costs Act 1998; and
(c) negligently failed to advise Ms Sehr that it was incumbent upon her to apply for payment of the school’s costs within the time limit.
The Defence
Best Hooper’s defence to this action has four main strands. First, that nothing Mr Robinson said or did was negligent. Second, even if Mr Robinson was negligent, no damage was suffered by Ms Sehr as a result of that negligence. Third, even if any alleged negligence did cause damage, it arose from negligence for which Ms Sehr could not recover since Best Hooper was protected by the advocate’s immunity. And fourth, if the advocates’ immunity did not apply, Ms Sehr had failed to mitigate her losses since the legal costs incurred by her to remedy the damage were unreasonably incurred in that they were excessive.
I will deal with the issues in that order.
Negligence - Advice on Costs
For a number of reasons, I do not think that Mr Robinson’s advice was negligent.
Firstly, I do not think that his advice that Ms Sehr’s out-of-pocket costs would be “no more than $1,000”, when read in context, can, as a matter of interpretation, be taken as an unqualified guarantee of a capped potential exposure to costs being awarded (or claimed) against Ms Sehr. Although that is not the precise formulation put, that was in substance the effect of what counsel for Ms Sehr submitted.
The letter of 1 February 2009, when read in its entirety, contains a number of phrases which show that the advice cannot be read in that way. In explaining that the costs recoverable from the Board were limited to $50,000, Mr Robinson said “[a]s we indicate above, the combined costs of both sides are very unlikely [my emphasis] to exceed $50,000 …”. Implicit in that statement, given the use of the words “very unlikely,” is that, although unlikely, the costs may possibly exceed that amount.
Further, although the phrase “will be no more than $1,000” is, when read by itself, suggestive of a capped amount, the sentence in which the phrase is found commences with the words “We estimate that a difference …”. The words “no more than $1,000” cannot be read outside of their context. In my opinion, the use of the word “estimate” likewise implies that the author considers and intends to convey that there may be some discrepancy between what is advised as a likely outcome, and what may in fact transpire.
It is important to bear in mind, also, that the estimate, and the advice, was based on Mr Robinson’s knowledge and experience. In only five appeal cases had matters proceeded to the High Court. No doubt, if that were to eventuate, then the costs would have been higher. But at the time he gave the advice, he was of the opinion, based on his experience, that the costs would reflect the more usual outcome which he had encountered on upwards of 40 occasions throughout his career.
I do not think that it was negligent of him not to advise Ms Sehr that the costs might be “indeterminate” (to adopt Ms Sehr’s description); indeed, I think it was appropriate that he gave his best estimate and I consider that his advice was couched in terms which would indicate to any reasonable reader that the final outcome may not equal the estimate.
The claim for $85,000 that was made was, in Mr Robinson’s considered view, excessive. As counsel for Best Hooper pointed out, if Mr Robinson had said that $85,000 was a likely amount to be awarded, that advice itself might have been negligent. And the mere fact that the school sought to claim that amount does not render Mr Robinson’s advice negligent. Mr Robinson had thought it unlikely from the start that the fees of senior counsel would be allowed. In this regard, it is instructive to recall that, in the end, the school came to accept this to be the case, as evidenced by its agreeing to settle the dispute by accepting the balance of what was available from the Board.
Furthermore, given that Mr Robinson gave advice that the school would not be awarded “disproportionate” costs, it is reasonable to infer that he had considered it possible that the school might seek initially to claim more than this. Mr Robinson’s advice on the other hand was directed at what the result would likely be if the costs were taxed. It is not uncommon in negotiations surrounding litigation that parties make claims which might be considered to be opening gambits, or ambit claims. I expect that this would be known by most in the community. I do not think it was negligent of Mr Robinson not to have expressly told Ms Sehr (who is the Mayor of a large Melbourne metropolitan council) that, while the final outcome would see her and the school’s costs covered by the Fund, that the school might not seek initially to recover more than this. The school’s ultimate acceptance of a settlement which saw its costs recovered against Ms Sehr being completely covered by the Fund supports, strongly in my view, a finding that Mr Robinson’s advice was not negligent but, in fact, well founded.
In summary, Ms Sehr has not proved that Mr Robinson’s advice on costs – that the $50,000 available from the Appeal Costs Fund would suffice, or largely suffice, to cover the combined costs of the parties – was negligent. She has not proved that he should have advised her that the school would claim $85,000 (or any other excessive amount). Accordingly, I find that Mr Robinson expressed reasonable care in giving the advice and I do not think, even with the benefit of hindsight, that it was erroneous.
Negligence – Appeal Costs Fund Time Limits
I do not agree that Mr Robinson was negligent in “failing” to apply to the Board in respect of the school’s costs, nor for failing to advise Ms Sehr of the time limit.
Section 35D of the Appeal Costs Act 1998 provides that an application for payment “must be lodged with the Board not later than 12 months after the final determination of the matter to which the indemnity certificate relates.”
In circumstances where the school had not presented its bill, I consider that Mr Robinson adopted a reasonable, not negligent, course in submitting an application only in respect of Best Hooper’s fees but at the same time putting the Board on notice that that was only part of the application. He made clear to the Board that the application may have been supplemented with further material once the school had presented its bill. In these circumstances, I consider that the application was lodged within time.
If it were the case that an application must not only be lodged within 12 months but also “perfected” within that time, a result which I would find odd, but on which I need not make any finding, the only thing which Mr Robinson could have done to protect Ms Sehr (and himself) would have been to pursue the school and somehow force it, whether by persuasion or perhaps some application to a court, to prepare its bill within the 12 months. That would, of course, have added to the costs of the matter in circumstances where the costs had already been very considerable, and this would have been in circumstances where Mr Robinson considered it possible that, if not prompted, the school may have not pressed its costs. But, even if it eventually did, he was of the view, reasonably in my opinion, that having put the Board on notice that the school’s costs may be sought later, that the application could be supplemented or, if required, a new application made out of time.
I accept that the Secretary of the Board appears to have taken a different approach to the application of s 35D of the Appeal Costs Act than the one which I would prefer. But I do not think Mr Robinson was negligent in not predicting that.
Also, I do not agree that it was negligent not to have advised Ms Sehr of the 12 month time limit. For one, Mr Robinson was of the view that the approach he had taken had preserved Ms Sehr’s position with respect to the time limit. I am not satisfied that Ms Sehr has proved that, had she been told of the time limit, she would have instructed Mr Robinson somehow to force the school to present its bill within the 12 month period. I find it more likely than not that, had Mr Robinson told her of the 12 month limit, but also of his rationale for not reminding the school of its “slackness”, and his view that the application could be supplemented if need be, Ms Sehr would have agreed with that course of action.
Causation
Even if Mr Robinson had been negligent in providing his advice, Ms Sehr must still show that she relied on the advice and that, in consequence, she has suffered damage. In my opinion, Ms Sehr has not shown this to be the case.
Ms Sehr said that, had she been advised that the potential costs to which she could have been exposed were indeterminate, she would simply have paid the terms’ fees.
I do not accept that Ms Sehr remained emeshed in the proceedings because she was of the view that her costs exposure would be limited to $1,000. In fact, Mr Robinson said, and I accept, that Ms Sehr would only settle the case on terms which did not require her to pay the disputed terms’ fees. And the school was not prepared to accede to this given that it wanted a ruling on the particular clause which Ms Sehr had challenged.
In fact, from the very start, following her receipt of Mr Kendall’s advice, Ms Sehr was seeking to settle the proceeding. I do not accept that, if Mr Robinson had given advice which envisaged the possibility of an excessive costs claim being made (and a claim was all it was) that Ms Sehr would have simply then paid the disputed fees. Her evidence was that she was disgruntled about the school’s treatment of her. That is borne out by her taking the matter to VCAT in the first place. It is also consistent with her instructions to Mr Robinson that she would only settle the matter so long as it did not require her to pay the disputed fees.
Moreover, whilst it was submitted that if properly advised Ms Sehr would have paid the fees at the outset, by that point there was no guarantee that the school would have simply accepted on that basis. Even then, notwithstanding that it was at an early stage of the appeal process, it may have made an exorbitant demand for costs. Ms Sehr has not proved otherwise.
Immunity From Suit
Best Hooper submitted that even if it had been negligent and caused the loss suffered by Ms Sehr, it was immune from suit in accordance with the immunity enjoyed by legal advocates: D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12. In that case, Gleeson CJ, Gummow, Hayne and Heydon JJ said at [86]:
… there is no reason to depart from the test described in Giannarelli as work done in court or "work done out of court which leads to a decision affecting the conduct of the case in court" or, as the latter class of case was described … "work intimately connected with" work in a court. (We do not consider the two statements of the test differ in any significant way.)
Mr Ribbands submitted that the immunity would not apply to Best Hooper’s conduct – in giving the advice on Ms Sehr’s possible costs exposure – since it was not connected with the conduct of the case in court but, rather, went to the very decision to pursue the case in court.
In support of that submission, Mr Ribbands contended that the purpose of the immunity is to quell controversies and that the immunity should cover (and only cover) work done which, if subjected to a claim of negligence, “would require the impugning of a final decision of a court or the re-litigation of matters already finally determined by the court”: see D’Orta-Ekenaike at [168]. Here, there is no such challenge to the final decision of the court. On the contrary, according to Mr Ribbands, Ms Sehr accepts the court’s decision as the correct one.
In my opinion, advice given to a client about the potential cost consequences of participating in a court case falls within both descriptions referred to above. Firstly, I consider that advice on costs to be incurred, and possibly awarded, at the end of a case, is “work intimately connected with” work in court. Indeed, the costs are the costs of that work. Secondly, I also consider that it would be "work done out of court which leads to a decision affecting the conduct of the case in court.” Indeed, on Ms Sehr’s own evidence, but for the advice, she would not have defended the appeal. If, as she says, Mr Robinson’s advice was the cause of “the conduct of [her] case in court,” I do not see how it could be said that the advice did not then also “affect” the conduct of that case. By that stage, the case was “in court”. A decision to defend, or not defend, that case, would be a decision affecting the conduct of the case.
Mr Ribbands’ submission on the other hand seeks to adopt their Honours’ obiter comments regarding the rationale for the immunity as though it were the test, or a component of that test, for deciding what conduct falls within the protection afforded by the immunity.
However, even though I understand the logical basis of Mr Ribband’s submission, I do not agree that the test, in either of its formulations, is to be qualified in that way. Support for this view is to be found in a decision of the New South Wales Court of Appeal in Attard v James Legal Pty Ltd [2010] NSWCA 311, a case decided after the High Court’s decision in D’Orta. In that case, a solicitor failed to advise his clients that litigation against a company which was subject to a Deed of Company Arrangement was stayed by the operation of s 444E(1) of the Corporations Law. As Giles JA noted in that case, in those circumstances, the costs wasted “should not have been incurred because CMG should not have been defending the cross-claim at all”: at [19].
That situation bears some resemblance to Ms Sehr’s case and Mr Ribband’s contention that, but for Best Hooper’s negligent advice, Ms Sehr would not have defended the appeal at all. It appears that the point raised by Mr Ribbands – that the immunity should not apply where there is no real question of the controversy being re-opened – was also considered in that case. As Giles JA observed: “ What is the offence to finality if the respondent’s conduct of the Orlando proceedings is held to have caused the appellants to incur unnecessary costs? There has not been a judicial determination …”: at [20]. His Honour concluded, at [30], that:
[V]iewing the present case as a wasted costs case, on the finality principle as applied in such a case to justify advocates immunity there need not be a challenge to finality of a judicial act at all. There is nonetheless immunity.
Failure to mitigate
It was put on behalf of Best Hooper that, if it were liable for damages, Ms Sehr had failed to mitigate that damage by engaging Defteros Lawyers and then paying it an excessive amount in fees. It was to this issue that Ms Young’s evidence was said to be relevant.
If Best Hooper’s conduct had been negligent, I would not agree that Ms Sehr failed to mitigate her loss. Having lost confidence in Mr Robinson (whether that was within itself reasonable or not), I consider it only natural that she sought alternative representation.
Ms Young’s evidence was directed at the amount which might be awarded by a Court according to scale. That is not the measure of damage which would apply. On Ms Sehr’s case, her loss flowed from her not being advised properly of the costs possibilities, thus disabling her from making a full surrender and paying the amount claimed and costs at the very start of the appeal process. If that were correct, then everything following that was incurred reasonably foreseeably as a result of Best Hooper’s negligence would be recoverable. What a court might award as costs in a contested action does not represent Ms Sehr’s loss. Her out of pocket expenses do, and they were a function of the costs agreement which she entered into with Defteros Lawyers.
Although, for the reasons set out above, I do have some reservations about whether it was truly necessary that an application to the Board needed to be brought “out of time,” it seems that that course was taken as a result of advice given by the Secretary of the Board to a junior solicitor at Defteros Lawyers. It might be that a more experienced solicitor would have challenged that view and the costs of that application avoided. But, having regard to the totality of circumstances, I do not think that the actions of Defteros Lawyers in making that application could be said to have been so unreasonable that Ms Sehr would be disentitled to damages.
Moreover, if the case of negligence against Best Hooper was correct, then it was only as a result of its negligent advice and conduct that Ms Sehr was exposed to any dealings with the Board. Accordingly, her costs of dealing with its vagaries as to whether applications were lodged in or out of time flowed from that negligence. Even though I disagree with the Secretary of the Board’s view that the application was not lodged in time, I accept that it was reasonably foreseeable that that approach was one that might be taken in respect of the school’s costs. It would follow, in my opinion, that the costs incurred by Ms Sehr in rectifying that “out of time” situation would be recoverable and, as noted above, I do not think that Ms Sehr’s engagement of Defteros Lawyers, and her payments to them, were so unreasonable that it could be held that she had failed to mitigate her loss.
Conclusion
The claim should be dismissed. Prima facie, Best Hooper is entitled to costs. I would ask the parties to prepare minutes of orders and reserve liberty to apply.
(Revised 14 October 2015)
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