Prichard v M 6:8 Legal Pty Ltd
[2024] WADC 63
•9 AUGUST 2024
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: PRICHARD -v- M 6:8 LEGAL PTY LTD [2024] WADC 63
CORAM: GETHING DCJ
HEARD: 1 AUGUST 2024
DELIVERED : 9 AUGUST 2024
FILE NO/S: CIV 1857 of 2019
BETWEEN: GABRIELLE MARY PRICHARD
Plaintiff
AND
M 6:8 LEGAL PTY LTD
First Defendant
MABEL LAI FUN CHUA
Second Defendant
Catchwords:
Pleadings - Whether a pleading contained statements made in the course of or for the purposes of an attempt to settle a proceeding by mediation - Whether a pleading disclosed a dispute as to whether or not the parties to a mediation entered into a binding agreement - Whether to give leave to re-plead
Legislation:
Supreme Court Act 1935 (WA), s 71(1), s 71(3)(b)
Result:
Statement of claim struck out
No leave to re-plead
Action dismissed
Representation:
Counsel:
| Plaintiff | : | In person |
| First Defendant | : | Mr J L Winton |
| Second Defendant | : | Mr J L Winton |
Solicitors:
| Plaintiff | : | Not applicable |
| First Defendant | : | MDS Legal |
| Second Defendant | : | MDS Legal |
Case(s) referred to in decision(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Bombardier Inc v Avwest Aircraft Pty Ltd [2020] WASCA 2
DM Drainage & Constructions Pty Ltd as trustee for DM Unit Trust t/as DM Civil v Karara Mining Ltd [No 3] [2018] WASC 398
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296
Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35
Moleirinho v Talbot & Olivier Lawyers Pty Ltd [2014] WASCA 65
Neil v Nott [1994] HCA 23; (1994) 68 ALJR 509; (1994) 121 ALR 148
Nobarani v Mariconte [2018] HCA 36
Noye v Gwilliam [2000] WASC 206
Nyoni v Patterson [2012] WASCA 171
Pigozzo v Mineral Resources Ltd [2022] FCA 1166
Pittornino v Meynert (as Executrix of the Wills of Guiseppe Pittorino (dec) and Guiseppina Pittorino (dec) [2002] WASC 76
Prichard v M 6 8 Legal Pty Ltd [2024] WASCA 4
Prichard v Prichard [2015] WASC 170
Prichard v Prichard [2015] WASC 170 (S)
Saffari v Western Australia Police [2022] WASC 200
Samuels v The State of Western Australia [2005] WASCA 193
Shilkin v Taylor [2011] WASCA 255
Smart v Prisoner Review Board (WA) [2012] WASC 48
Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
Warren v Lawton [2014] WASC 59
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Woodley v Woodley [2018] WASCA 149
X (a pseudonym) v Y (a pseudonym) [2022] WADC 85
Zaghloul v Bayly [2021] WASCA 125
Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40
GETHING DCJ:
Introduction
In this action, the plaintiff is suing a firm of lawyers and its principal (defendants) whom she retained to act for her in two Supreme Court proceedings over 10 years ago. The proceedings related to the estate of her late father. They were against her siblings, one of whom was the executor of their father's estate. In this first proceeding, the plaintiff challenged the construction of her father's will (Testamentary Proceedings). The second related to certain share transfers involving the family (Share Transfer Proceedings).
The proceedings were the subject of a Supreme Court mediation on 22 May 2013. At the conclusion of the mediation, the plaintiff's siblings made a written offer to settle both proceedings by, among other things, payment of a specified sum of money to the plaintiff from their father's estate (Siblings' Offer). The Siblings' Offer was open for acceptance for two days, with acceptance to be communicated to the executor's solicitors.
Within the time for acceptance of the Siblings' Offer, the defendants, on this instruction of the plaintiff, sent a response to the executor's solicitors indicating that the plaintiff would accept the Siblings' Offer on two conditions. The conditions were that payment of the settlement sum to the plaintiff be by a specified date and that consent orders for dismissal of the proceedings would be exchanged for a bank cheque for the settlement sum. After a period of non‑responsiveness, the executor's solicitors indicated that they treated the plaintiff's response as her rejection of the Siblings' Offer and a counteroffer which their client did not accept.
The Testamentary Proceedings proceeded to a trial at which the plaintiff was substantially unsuccessful.[1] The amount she received from her father's estate was substantially less than the Siblings' Offer. No order for costs was made in the Testamentary Proceedings, other than that the executor's costs were to be paid from the estate on an indemnity basis. The Share Transfer Proceedings were struck out with an order that the plaintiff pay the other parties' costs of those proceedings.
[1] Reported as Prichard v Prichard [2015] WASC 170 and Prichard v Prichard [2015] WASC 170 (S).
In May 2019, the plaintiff commenced the present action in the District Court. According to the writ, as later amended, her claim is with respect to legal services provided to the plaintiff by each defendant relating to her claims with respect to the estate of her late father, including but not limited to legal services relating to the Testamentary Proceedings and the Share Transfer Proceedings. In essence, the plaintiff's claim is that, had the defendants not been negligent or in breach of contract, there would have been a binding agreement in terms of the Siblings' Offer and she would not have suffered the loss in broad terms comprising the difference between what she would have received under the Siblings Offer and what she did receive following the decision in the Testamentary Proceedings.
The plaintiff's claim faces a significant hurdle. This is because the Siblings' Offer fell within the scope of the mediation privilege in Supreme Court Act 1935 (WA) (SCA) s 71. The defendants challenged the statement of claim filed on 4 November 2020 (Original SC) primarily on the basis that it pleaded facts which fell within SCA s 71. Her Honour Judge Sweeney agreed, publishing reasons (which I will refer to as Prichard DC).[2] The formal orders made required the plaintiff to file and serve a minute of proposed substituted statement of claim.
[2] Reported as X (a pseudonym) v Y (a pseudonym) [2022] WADC 85 (Prichard DC). Her Honor considered it appropriate to anonymise the parties to prevent the trial judge from being informed of any inadmissible and confidential material ([4] - [5], [144]). The Court of Appeal did not consider this necessary given that the decisions in footnote 1 had by that time been published in which the Siblings' Offer and the plaintiff's response had been disclosed: Prichard v M 6:8 Legal Pty Ltd [2024] WASCA 4 [67] (judgment of the court) (Prichard CA). I adopt the same approach as the Court of Appeal.
The plaintiff appealed. The appeal was unsuccessful (the reasons for which I will refer to as Prichard CA).[3]
[3] Prichard CA.
Following the appeal, the action was referred to me for case management. I reiterated the order for the plaintiff to file and serve a minute of proposed substituted statement of claim. The plaintiff did so by a minute filed 6 May 2024 (Proposed SC).
The defendants assert that the Proposed SC contains the substantially the same factual matters as in the Original SC which fall within the scope of SCA s 71. They also raise issues relating to abuse of process and other pleadings deficiencies.
The plaintiff says that the pleading in the Proposed SC now falls within one of the exceptions to SCA s 71. This is because it raises the issue of whether the parties to the mediation entered into a binding agreement.
It is necessary to begin the analysis with a consideration of the framework within which I am to analyse the Proposed SC (Part 2) and the scope of SCA s 71 (Part 3). I then set out the factual matters which as a result of Prichard DC and Prichard CA have been identified as falling within the scope of SCA s 71 (Part 4). This then provides the context in which to consider the plaintiff's argument that the pleading in the Proposed SC raises the issue of whether the parties to the mediation entered into a binding agreement (Part 5). I conclude that it does not. The consequence is that the action should be dismissed with costs (Part 6).
Framework for analysing the Proposed SC
The defendants have applied for orders either that the Proposed SC be struck out pursuant to RSC O 20 r 19(1) or the leave to amend in terms of the Proposed SC be refused pursuant to O 21 r 5(2). The substantive principles are the same.
The effect of the excisions of the material in the Original SC identified by Judge Sweeney as being in breach of SCA s 71 is that, in my view, what is left of the Original SC does not disclose a reasonable cause of action within RSC O 20 r 19(1). However, no order has yet been made to strike it out. One should be now made.
Where a pleading is struck out, the power to amend without leave[4] does not arise as there is no pleading left to amend. In any event, the power to amend as of right can be overridden by case management orders.[5] In either case, the appropriate case management order was to give the plaintiff the opportunity to file a further minute of proposed substituted claim for review by the court. The issue is for determination is whether the plaintiff should be given leave to file a substituted statement of claim in terms of the Proposed SC.
[4] In the District Court contained in District Court Rules 2005 (WA) r 48A.
[5] Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35 [20], [76] (judgment of the court) (Mann).
Order 21 r 5 provides that the court may allow the amendment of a writ or pleading on such terms as to costs or otherwise as may be just and in such manner as the court may direct. This power involves the exercise of a discretion in the interest of justice, one which is informed by the case management objectives of the court.[6] The interests of justice requires that parties have a proper opportunity to plead their case.[7] There are limits:[8]
The court will not allow amendments which amend a pleading into a form which ought to be struck out. The court will not give leave to a party to make a defective amendment and will disallow amendments which are defective.
[6] Zaghloul v Bayly [2021] WASCA 125 [74] (judgment of the court) (Zaghloul); Mann [78]; DM Drainage & Constructions Pty Ltd as trustee for DM Unit Trust t/as DM Civil v Karara Mining Ltd [No 3] [2018] WASC 398 [16] (Allanson J).
[7] Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296 [52] (Beech J) (Hightime).
[8] Warren v Lawton [2014] WASC 59 [30] (Le Miere J). See also: Nyoni v Patterson [2012] WASCA 171 [38] (Pullin JA, with whom Buss & Murphy JJA agreed).
A party may be given leave to re-plead if the court is satisfied that the party may be able to plead a viable cause of action with reasonable amendment. However, the point can be reached in a case where the party has had sufficient opportunity to put its case and that further amendment ought not be allowed, and the action summarily dismissed.[9]
[9] Hightime [52]; Saffari v Western Australia Police [2022] WASC 200 [10] (Acting Master Strk) (Saffari); Noyev Gwilliam [2000] WASC 206 [31] (Master Sanderson); Pigozzo v Mineral Resources Ltd [2022] FCA 1166 [25] - [33] (Fuetrill J) the cases cited therein.
In dealing with these issues, I bear in mind that the plaintiff is a litigant in person. As a litigant in person, she is entitled to some leniency in relation to compliance with the court rules.[10] The court is required to approach the documents in which she articulates her case with some flexibility.[11] The court needs to be astute to ensure that, in a poorly expressed or unstructured document in which she sets out her case, there is no viable case which, with appropriate amendment or permissible assistance from the court, could be put into proper form.[12] A 'frequent consequence of self‑representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy'.[13]
[10] Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (reasons of the court).
[11] Wentworth v Rogers(No 5) (1986) 6 NSWLR 534, 536 ‑ 537 (Kirby P with whom Hope & Samuels JJA agreed); Smart v Prisoner Review Board (WA) [2012] WASC 48 [10] (Pritchard J).
[12] Sethi v Bhavsar [2020] WASCA 52 [27] (reasons of the court) (Sethi).
[13] Neil v Nott [1994] HCA 23 [5]; (1994) 68 ALJR 509, 510; (1994) 121 ALR 148, 150 (Kiefel CJ, Gageler, Nettle, Gordon & Edelman JJ); Sethi [27].
At the same time, the court needs to ensure that any latitude given to one party as a litigant in person does not deprive the other of their right to procedural fairness and a fair hearing.[14] The balance is ordinarily struck by limiting the assistance given to a litigant in person to that which is necessary to overcome, so far as is reasonably practicable, the procedural disadvantages a litigant in person faces by reason of not being legally trained.[15]
[14] Nobarani v Mariconte [2018] HCA 36[47] (Kiefel CJ, Gageler, Nettle, Gordon & Edelman JJ); Woodley v Woodley [2018] WASCA 149 [76] (judgment of the court); Moleirinho v Talbot & Olivier Lawyers Pty Ltd [2014] WASCA 65 [51] (judgment of the court).
[15] Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40 [74] - [75] (judgment of the court).
The scope of SCA s 71
SCA s 71 is in the following terms:
71. Privilege
(1)Subject to subsection (3), evidence of -
(a)anything said or done; or
(b)any communication, whether oral or in writing; or
(c)any admission made,
in the course of or for the purposes of an attempt to settle a proceeding by mediation under direction is to be taken to be in confidence and is not admissible in any proceedings before any court, tribunal or body.
(2)Subject to subsection (3) -
(a)any document prepared in the course of or for the purposes of an attempt to settle a proceeding by mediation under direction; or
(b)any copy of such a document; or
(c)evidence of any such document,
is to be taken to be subject to a duty of confidence and is not admissible in any proceedings before any court, tribunal or body.
(3)Subsections (1) and (2) do not affect the admissibility of any evidence or document in proceedings if -
(a)the parties to the mediation consent to the admission of the evidence or document in the proceedings; or
(b)there is a dispute in the proceedings as to whether or not the parties to the mediation entered into a binding agreement settling all or any of their differences and the evidence or document is relevant to that issue; or
(c)the proceedings relate to a costs application and, under the rules of court, the evidence or document is admissible for the purposes of determining any question of costs; or
(d)the proceedings relate to any act or omission in connection with which a disclosure has been made under section 72(2)(c).
(4)A mediator cannot be compelled to give evidence of anything referred to in subsection (1) or (2) or to produce a document or a copy of a document referred to in subsection (2) except -
(a)in proceedings referred to in subsection (3)(d); or
(b)in proceedings relating to a costs application where there is a dispute as to a fact stated or a conclusion reached in a mediator's report prepared under the rules of court on the failure of a party to cooperate in the mediation and the evidence or document is relevant to that issue.
(5)In subsections (3) and (4) -
costs application means an application for the costs of the mediation or of the proceedings to which mediation relates.
It is complemented by a confidentiality obligation on the mediator in SCA s 72:
72. Confidentiality
(1)Subject to subsection (2), a mediator must not disclose any information obtained in the course of or for the purpose of carrying out mediation under direction.
(2)Subsection (1) does not apply if -
(a)the disclosure is made for the purpose of reporting under the rules of court on any failure of a party to cooperate in a mediation; or
(b)the disclosure is made with the consent of the parties; or
(c)there are reasonable grounds to believe that the disclosure is necessary to prevent or minimize the danger of injury to any person or damage to any property; or
(d)the disclosure is authorised by law or the disclosure is required by or under a law of the State (other than a requirement imposed by a subpoena or other compulsory process) or the Commonwealth.
In Prichard CA, the Court of Appeal made the following observations about the interpretation of CA s 71:
(a)the purposes of SCA s 71 and s 72 include the promotion of free discussion at mediations to maximise the opportunity for settlement of proceedings by agreement;[16]
(b)inadmissibility is not confined to admissibility in the proceedings which are the subject of mediation;[17]
(c)nor is SCA s 71 confined to proceedings between the parties to the mediation;[18]
(d)the exceptions in SCA s 71(3) are very limited and are clearly more confined than the exceptions to the common law 'without prejudice' privilege;[19] and
(e)one incidental effect of the statutory language used in SCA s 71 is that a party is prevented from bringing proceedings in negligence against their own solicitor in respect of the solicitor's conduct in, or in relation to, the mediation.[20]
[16] Prichard CA [58] (judgment of the court).
[17] Prichard CA [50].
[18] Prichard CA [50].
[19] Prichard CA [50].
[20] Prichard CA [58] - [59].
The Court of Appeal considered the issue of whether it would be possible to imply some additional exceptions into SCA s 71. The court observed that the enactment of specific exceptions to the rule makes it more difficult to imply additional exceptions.[21] The court ultimately concluding that it was not necessary for it to form any view on this issue in order to determine the appeal:[22]
There might be some implications that should be made to avoid s 71 operating to establish a mediation room as an island of immunity from the application of the law in a manner Parliament could not have objectively intended. It would be at least curious that criminal conduct or tortious acts, such as fraudulent statements inducing a party to enter into a settlement agreement or unlawful threats procuring a benefit, should be immunised from criminal and civil proceedings through an evidentiary rule. No doubt circumstances of that nature may give rise to a dispute about whether the parties entered into a binding agreement and whether the exception in s 71(3)(b) therefore applies. But implications may be justified even in circumstances where no such dispute is formally agitated.
For example, it might be that the reference to an 'attempt to settle' in s 71 is to a genuine attempt to settle by lawful means, so that criminal conduct, professional misconduct, threats or fraudulent statements stand outside the protection of the provision. It may be that, in some circumstances, improper conduct will mean that there is no mediation at all. Suggestions of limitations of this kind in provisions providing for a statutory privilege in relation to statements and conduct in mediation have been made from time to time …
However, it is unnecessary for this court to form any view as to whether implications of the kind suggested in the previous paragraph should be drawn in the case of s 71 of the Act. None of those suggested implications, if made, would assist the appellant in the present case.
[21] Prichard CA [50].
[22] Prichard CA [52] - [54].
Factual matters falling within the scope of SCA s 71
The Court of Appeal identified a number of specific factual matters contained in with Original SC which fall within the scope of SCA s 71:[23]
The siblings' offer was plainly a written communication, and a document prepared, in the course of or for the purposes of an attempt to settle a proceeding by mediation under direction. Unless one of the exceptions in s 71(3) applies, that written communication, any copy of the document and any evidence of the document, is 'to be taken to be subject to a duty of confidence'. More importantly, subject to s 71(3), that written communication, any copy of the document and any evidence of the document is not admissible in any proceedings before any court, tribunal or body.
The same conclusions apply in relation to the appellant's response, sent after the mediation conference, to the siblings' offer which was made in the mediation conference. The appellant's response formed part of the attempt to settle the proceedings in the mediation. Although not made in the mediator's presence, it was a communication made, and document prepared, in the course of and for the purposes of an attempt to settle a proceeding by mediation under direction. Questions may well arise in respect of communications that are more removed, either temporally or contextually, from the mediation. But it is not necessary to explore those boundaries here. The nexus both temporally and contextually in this matter is beyond question.
…
None of the exceptions in s 71(3) of the Act applied to make evidence of the siblings' offer or the appellant's response admissible in the primary proceedings. It was common ground that the siblings had not consented to the admission of the evidence in the primary proceedings, so s 71(3)(a) was not engaged. There was no dispute in the primary proceedings as to whether the parties at the mediation entered into a binding agreement to settle the testamentary proceedings and the share transfer proceedings. As noted above, it was a premise of the appellant's claim that the appellant's response was correctly characterised as a counteroffer that the siblings did not accept. The respondents did not dispute that premise in the primary proceedings. Therefore, s 71(3)(b) was not engaged. The primary proceedings did not relate to a costs application, so s 71(3)(c) was not engaged. There is no suggestion that s 71(3)(d) was engaged.
[23] Prichard CA [48] - [49], [51]. The definitions I have used are the same as used by the Court of Appeal.
The Court of Appeal also rejected an argument by the plaintiff that the Siblings Offer was not an 'admission made' in the course of the mediation:[24]
There is no merit to the appellant's submissions that the siblings' offer was an 'acknowledgement' rather than an admission which was therefore not protected by the statutory privilege in s 71 of the Act. The substantive distinction between an 'acknowledgement' and an admission is difficult to perceive. In any event, whether or not the protection offered by the common law 'without prejudice' privilege extends beyond admissions, the protection offered by s 71 of the Act is clearly not confined to admissions. This is evident from the language of s 71(1)(a) - (c), which refers to 'anything said or done' and 'any communication' as well as 'any admission'.
[24] Prichard CA [55] (reference omitted).
The Court of Appeal further rejected an argument by the plaintiff the defendants negligently departed from her instructions to a degree that it did not constitute part of a genuine attempt to settle the matter:[25]
Nor can we accept that the appellant's response negligently departed from the appellant's instructions to a degree that it did not constitute part of a genuine attempt to settle the matter. The appellant's plea was that she instructed the second respondent to send the appellant's response in the form it was sent. It is uncontentious that the terms of the appellant's response were provided to the appellant before it was sent to the executor's solicitors. On the appellant's case, which is premised on the appellant's response constituting a counteroffer, she did not properly understand the effect of the appellant's response. On the appellant's case, that lack of understanding was a product of the respondents' negligent failure to provide her with advice as to the true legal effect of the appellant's response. However, irrespective of any misunderstanding by the appellant or the cause of that misunderstanding, the appellant's response was, on the appellant's own case, sent on her express instructions and was an attempt to settle the proceedings. As a response to a written offer made in the mediation conference, the appellant's response was made in the course of or for the purposes of an attempt to settle the proceedings by mediation under direction.
[25] Prichard CA [56] (references omitted).
The Court of Appeal made some observations in relation to communications between a party to a mediation and its own legal representatives:[26]
It is unnecessary in this case to determine the extent to which private communications between a party to a mediation under direction and that party's own legal representative are captured by s 71 of the Act. Whatever may be the position regarding private communications between a party and their own legal representatives, the inadmissible communications and documents in this case are the communications between parties to the mediation. It is the siblings' offer and the appellant's response which the appellant seeks to prove in order to establish the loss claimed in the primary proceedings.
[26] Prichard CA [60].
The Court of Appeal also considered, and rejected, an argument by the plaintiff that the siblings had waived the statutory privilege created by SCA s 71:[27]
The primary judge in effect held that the privilege created by s 71 of the Act is not subject to waiver. However, it has been held, at single judge level in New South Wales, that provisions of the Civil Procedure Act 2005 (NSW) which are similarly structured to s 71 and s 72 of the Act operate subject to the waiver doctrine.
In the present case it is not necessary for this court to resolve this difference of approach. Even assuming waiver to be possible, it is not reasonably arguable that all the siblings waived the privilege under s 71 of the Act. The conduct on which the appellant relies as constituting waiver was that of counsel for the executor in the testamentary proceedings in referring to the siblings' offer and the appellant's response for the purposes of seeking a costs order against the appellant in those proceedings. However, this was not conduct by the other siblings. Contrary to the appellant's submissions, there is no basis in the evidence for saying that counsel for the executor was acting on their behalf in engaging in that conduct before the trial judge. Counsel was recorded in the trial judge's decision as appearing only for the executor. The covering letter providing the mediation material to the court indicated that the solicitors acted only for the executor and that Ian Prichard acting in his personal capacity took a different position in relation to costs. The primary judge was correct to find that the fact that the other siblings had not waived privilege was fatal to the appellant's argument.
The same can be said in relation to the appearance before a registrar of the Supreme Court in the testamentary proceedings on 26 March 2014. Some discussion about and disclosure of the siblings' offer and the appellant's response took place during that appearance, and the transcript appears to record counsel having appeared for Paul Prichard as well as Ian Prichard. There is no indication or suggestion however of the other siblings (Michael and Louise) having been represented at that hearing.
[27] Prichard CA [63] - [65] (references omitted).
The Court of Appeal concluded:[28]
The primary judge was correct to find that s 71 of the Act made evidence of the siblings' offer and the appellant's response inadmissible in the primary proceedings in circumstances where none of the exceptions provided for in s 71(3) applied.
For these reasons, neither the siblings' offer nor the appellant's response are admissible in the primary proceedings to prove the claim which the appellant sought to advance before the primary judge. The primary judge was correct to conclude that the parts of the statement of claim referring to the siblings' offer and the appellant's response should be removed. That conclusion is sufficient to support the interlocutory order requiring the appellant to file a substituted statement of claim in the primary proceedings.
[28] Prichard CA [60] - [61].
In Prichard DC, Sweeney DCJ also referred to a second cause of action in the Original SC. This was based on an allegation that the defendants failed to serve the writ in the Share Transfer Proceedings 'within an appropriate time' which caused the plaintiff to 'lose the ability to claim as additional amount of $135,000 plus interest' from her father's estate (Original SC, par 1A). Her Honour held that this cause of action also fell within the scope of SCA s 71:[29]
I can see no means by which the plaintiff can plead the cause of action concerning her second writ without infringing s 71(1), because her case is that the consequence of the failure to serve the writ was that the offer made during court‑directed mediation was limited to what she could ask for in relation to the first action, and those discussions and that offer are simply inadmissible. The cause of action therefore deteriorates to a complaint to the writ wasn't served when she thought it would be, with no consequences sounding in potential damages.
[29] Prichard DC [141], also [137] - [140].
It is also instructive to add the concluding observation of Judge Sweeney:[30]
The evidence being inadmissible, the plaintiff will not be entitled at trial to refer to the offer which was made by the defendants during mediation - indeed anything said or done during that mediation which falls within s 71 ‑ or the response to that offer, or any discussions between her and her lawyer about that offer which might tend to suggest that the offer was made, or what the offer consisted of. Further, the statement of claim itself breaches the confidentiality requirements of s 71. It is not sufficient to rule the evidence inadmissible - matters currently pleaded in the statement of claim are confidential and must not be revealed to anyone, including the trial judge. It follows that those references to the defendants' offer and the former lawyer's response to it contained within the statement of claim cannot stand.
[30] Prichard DC [142].
Her Honour then annexed to the reasons for decision 'Annexure A', setting out the specific passages from the Original SC which by SCA s 71 cannot be in the statement of claim.
Does the Proposed SC raise the issue of whether the parties to the mediation entered into a binding agreement?
Counsel for the defendants was critical of the plaintiff for including in the Proposed SC material falling within Annexure A to Prichard DC. The plaintiff's response was that the Proposed SC now includes a dispute as to whether the parties at the mediation entered into a binding agreement to settle the testamentary proceedings and the share transfer proceedings. At [23] I noted the conclusion of the Court of Appeal that the Original SC did not engage SCA s 71(3)(b) as there 'was no dispute in the primary proceedings as to whether the parties at the mediation entered into a binding agreement to settle the testamentary proceedings and the share transfer proceedings'.[31] This issue I need to determine is whether the Proposed SC does.
[31] Prichard CA [51].
In her summary in par 1E of the Proposed SC, the plaintiff identifies as the fifth instance of professional negligence a failure by the defendants to advise her that she had a binding agreement that was capable of, and should have been, enforced by the defendants. This was a new allegation, with the preceding four instances of professional negligence being in the Original SC.
It is necessary to quote from the Proposed SC in some detail. I proceed on the basis that, at trial, the plaintiff would give evidence in terms set out in the Proposed SC. The relevant paragraphs as to what transpired at the mediation are as follows:
34.As discussed at paragraph 29. above, the outcome of the 2013 Mediation on 22 May 2013 was a handwritten Offer to the Plaintiff of $350,000. Either knowingly or negligently the First Defendant and the Second Defendant failed to advise the Plaintiff that a letter dated 24 May 2013 prepared by the Second Defendant and emailed to Mark Fatharly, the Executor's solicitor, was considered by Mark Fatharly and the Executor to be a counter offer at law (Hyde v Wrench [1840] 49 ER 132.
35.Asking for the Plaintiff's express permission to send that letter together with a failure to explain to the Plaintiff the consequences of the inappropriate wording of the Letter of acceptance of the offer of $350,000 the outcome of the 2013 Mediation before Registrar Dixon in the Supreme Court of Western Australia which was then regarded by the Estate of Kenneth William Prichard as a counter offer and which was rejected by the Estate. directly caused the Plaintiff to lose her claim the amount of $350,000 from the Estate of Kenneth William Prichard.
36.The Mediation ran from approximately 10am to 5pm wherein the Second Defendant took notes in summary of the 2013 Mediation. By 4.00pm the Second Defendant wrote a file note:
Reopened offer of $350,000
Ask to leave open for 7 days (to 29/5/2013 - 5pm)
• instead left open til 5pm on Friday 24/05/2013
details: offer is for $350,000
with respect to action CIV 2843/2012 CIV 1218/2013 in Supreme Court of WA
the defendants to defendants to 2843 offer to settle with the P
terms: 1st D
37.During the course of the 2013 Mediation the Plaintiff asked for a payment date knowing that the monies were in a term deposit (as Mark Fatharly stated that the money would be available after the roll over date of 2 June 2013). The Plaintiff was concerned that unless a date for payment was specified the Executor and the other Siblings may defer payment for as long as possible as any interest on the principal amount remained with them exclusively. Mark Fatharly verbally agreed that payment could be made by 4 June 2013 but this statement was not included in the handwritten Offer.
38.At the closure of the meeting an Advice as to Offer of Settlement (the Offer) was handwritten by Mark Fatharly and signed by the Executor and each and all the other Siblings. The Offer was given to the Plaintiff and Second Defendant offering the net sum of $350,000 cash but was not made pursuant to Supreme Court Order 24A rule as the defendants therein did not want the offer to remain open for 28 days.
39.The Offer stated that it was conditional upon:
(a)both actions CIV/2843/2012 and CIV/1218/2013 being dismissed by consent with no order as to costs other than the Executor's costs being paid out of the Estate of the Deceased; and
(b)each of the Plaintiff, the Executor and the other Siblings enter into a Deed of Family Arrangement which would set out the terms of settlement as per the handwritten offer.
The Offer was open until 5.00pm Friday 24 May 2013.
40.When leaving the Court building, the Plaintiff informed the Second Defendant that the Plaintiff would accept the Offer, but noted that there was no date for payment recorded on the Offer even though Mark Fatharly had verbally agreed to this during the 2013 Mediation. The Second Defendant responded that she would 'sort that out'.
…
49.At approximately 10.30am on 24 May 2013 the Plaintiff attended the offices of the First Defendant and re-affirmed to the Second Defendant the Plaintiff's unconditional acceptance of the Offer. The Second Defendant recorded the Plaintiff's exact words in the margin of a file note dated 24 May 2013 and analysed in detail below at paragraph 52:
the Plaintiff will accept offer and it's time to move on.
50.The Plaintiff believed that if she did use the word will it was in the context that she is willing to accept the Offer not that she would accept the Offer if further conditions were met as is evidenced by the Plaintiff's comment it's time to move on and certainly not to keep this matter going for another round of negotiations. The Plaintiff merely wanted to clarify the date by which her money would be provided to her as indicated in paragraphs 37. above. The Plaintiff was not asking for an additional term or further condition as she was very agreeable to receiving the amount of $350,000 in full and final settlement of this matter. The Plaintiff is convinced that the Second Defendant understood the finality of what she was expressing.
…
53.At 12.17pm on 24 May 2013 the Plaintiff received an email from the First Defendant attaching a draft letter from the First Defendant to Mark Fatherly at Kott Gunning marked as 'WITHOUT PREJUDICE SAVE AS TO COSTS' which in substance read:
…our client will accept the offer (being the Offer of Settlement made by the defendants on 22 May 2013) on the following conditions:
a)That her entitlement under the Estate paid to her on 4th June 2013, being the first business date after the maturity date of the term deposit;
b)The Minute of consent orders for dismissal of both actions will be provided to your firm in exchange for a bank cheque in the sum of $350,000 made payable to our client.
In the body of the email the First Defendant asked the Plaintiff to:
…please confirm that I have instructions to send this.
54.The Plaintiff asserts that the Second Defendant was fully aware of the long-standing familial dispute and animosity between the Plaintiff, the Executor and the other Siblings and was aware that the Executor:
a)Prior to 2008, but for the Plaintiff's complaint to ASIC, Ian Prichard was to receive all of the shares in the Company (the subject of CIV/1218/2013) pursuant to an inheritance letter which was held by Graeme Lean when he was acting for the Company;
b)The Plaintiff may get a lesser amount from the distribution of the residuary estate under the Will if the hotchpot clause was constructed unfavourably to the Plaintiff's case;
c)The Executor had in the past refused to negotiate with the Plaintiff and instead directed the Plaintiff to 'have the matter litigated in Court if she wished to proceed', which was the instigation for seeking advice from the First and Second Defendant in the first instance; and,
d)The Executor was likely to renege on the Offer or reject a counter offer as in doing so, it would likely increase his and the other beneficiaries personal benefit by $37,000 or more.
55.Therefore as the Second Defendant was fully aware that when the Plaintiff said she will accept the Offer she did so unconditionally (as referred to in paragraphs 40., 49. - 50. and 52. above) the Second Defendant acted negligently in wording the Letter wherein it read that the Plaintiff will accept the Offer on the following conditions and as a professional legal representative knew or ought to have known that the wording of her letter may give rise to it being characterised as a counter offer (Hyde v Wrench [1840] 49 ER 132).
56.The Plaintiff, as a layperson, relied upon the Second Defendant's professional legal expertise in appropriately wording the Letter of acceptance to the Executor's legal representative, expressing the Plaintiff's unconditional acceptance of the Offer (the Letter). The Plaintiff was in complete ignorance of the law and that the Second Defendant had created a counter-offer pursuant to the wording of the Letter.
57.At 1pm on 24 May 2013 the Plaintiff instructed the Second Defendant, as requested, in the affirmative to send the Letter in the form it was shown to the Plaintiff and at 2.08 pm the First Defendant emailed the Letter to Mark Fatharly.
What is very clear from these paragraphs is that:
(a)the handwritten document provided to the plaintiff at the end of the mediation was styled an 'offer' that was to remain open until 5.00 pm on 24 May 2013 (being what I have referred to as the Siblings' Offer);
(b)the plaintiff's conversations with the second defendant after leaving the mediation on 22 May and at her office on 24 May were in terms of the plaintiff wanting to 'accept' the Siblings Offer;
(c)the draft letter from the defendants to the executor's lawyer was expressed in terms of accepting the offer; and
(d)the plaintiff instructed the defendants to send the letter in (c).
Towards the end of the Proposed SC, the plaintiff adds three paragraphs under the heading: 'The plaintiff left the mediation of 22 May with a binding agreement: s71(3)(b)'. These paragraphs were not in the Original SC. They read (the paragraphs are in sequential order but there is an error in the paragraph numbering, that is, there are no paragraphs numbered 117 to 123);
115.The Defendants were negligent in not advising the Plaintiff, at the time the Offer was made, that the Plaintiff had a binding agreement. Mr Fatharly states on page 6 of the transcript of the directions hearing before Registrar Boyle (CIV 1857 of 2013) 'I wrote the offer on behalf of all of the defendants' and on page 7 Mr Fatharly states 'and certainly the Plaintiff's position in that respect is that she thought that there was an agreement'.
a)At the conclusion of the Mediation the Plaintiff believed that she had a binding agreement whereby the defendants (CIV 1857 of 2013) agreed to settle the all matters.
b)The Second Defendant was well aware that the Plaintiff had genuinely accepted the Offer as evidenced in the Defendants hand written notes between 14 May 2014 and 10 July 2014.
c)The Defendant's letter on 24 May 2013 to the Plaintiff asking for the Plaintiff's permission to send the reply to Mr Fatharly in the early afternoon of the deadline date, was coercive and abusive towards the Plaintiff given the time constraints and lack of explanation. The request contained no explanation of what the effect of the Letter might be letter be.
f)Having never sought permission from the Plaintiff to send a communication before, it now appears to the Plaintiff that the Defendant was aware of the strategic nature of that communication and needed to 'tick all the boxes'. The defendants led the primary judge to believe that the form and content of the Letter was at the Plaintiff's behest, not of the Defendants' making nor of the Defendants' instigation. The Second Defendant deliberately and unconscionably sought the Plaintiff's permission to send the Letter so as to protect herself from what was an oppressive and unreasonable advantage over a vulnerable client.
The Plaintiff considers this to have been misleading and deceptive conduct with undue influence, in that the balance of power was clearly with the Defendants.
116.Whereas the Plaintiff understood that she had made a genuine attempt to settle the matter, ('it's time to move on' and 'client will accept the offer') as noted by the Second Defendant on 24 May 2013, the Defendants' motives in writing a counter-offer are questionable. The second defendant engineered terms that had not been intended by the Plaintiff nor explained to the Plaintiff. In that sense the Plaintiff could not be considered to have consented to that which she did not understand. The onus rested on the second defendant to explain all of the conditions.
123.The plaintiff's former lawyers were negligent in failing to respond to the offer in such a way as to avoid making a counter offer, while also including some certainty about the date upon which the plaintiff would receive payment of the offered sum.
The assertion by the plaintiff at par 115(a) that, at the conclusion of the mediation, she believed that she had a binding agreement whereby her siblings had agreed to settle the Testamentary Proceedings is inconsistent with what she says was her understanding in the paragraphs quoted at [34] and summarised at [35] above. Moreover, it is inconsistent with the communications between the parties which are unambiguously expressed in terms of an offer and an acceptance (albeit with conditions that made it a counteroffer).
As the Court of Appeal observed in Bombardier Inc v Avwest Aircraft Pty Ltd:[32]
It is a fundamental premise of the law of contract that acceptance of an offer involves a communication, to the offeror, of both an unqualified agreement to the terms of the offer and to the implied invitation within the offer that the offeree commit to a contract. The general rule is that the contract will not be made until the acceptance has been communicated, by some external manifestation of assent, to the offeror.
The plaintiff does not plead that she communicated an unqualified agreement to the terms of the Siblings' Offer to the executor's solicitor, either at the mediation or after it.
[32] Bombardier Inc v Avwest Aircraft Pty Ltd [2020] WASCA 2 [66] (judgment of the court) (references omitted). The exceptions to the general rule are discussed at [67] and [68].
The present case may be contrasted to what occurred in Pittornino v Meynert.[33] That case also concerned a dispute involving a will. The initial proceedings in the Supreme Court went to a mediation. The plaintiff was represented at the mediation. At the conclusion of the mediation, a handwritten document was prepared recording the agreement reached. It was signed by all solicitors and parties present at the mediation, including the plaintiff. The plaintiff commenced subsequent proceedings in the Supreme Court seeking to set aside the agreement on the basis that, among other things, the purported agreement was unconscionable, she was subjected to undue influence by the mediator, she was the subject of acrimony at the mediation and her ill health at the mediation. The judge reviewed the handwritten agreement, and the circumstances in which it was entered into, according to ordinary contractual principles and declined to set it aside.
[33] Pittornino v Meynert(as Executrix of the Wills of Guiseppe Pittorino (dec) and Guiseppina Pittorino (dec)) [2002] WASC 76.
In my view, the assertion that at the mediation the parties entered into a binding agreement depends on an untenable and groundless factual allegation, being that the plaintiff communicated an unqualified acceptance of the Siblings' Offer. It is for that reason 'vexatious' within RSC O 20 r 19(b).[34]
[34] Samuels v The State of Western Australia [2005] WASCA 193 [11] (judgment of the court).
Alternatively, the assertion that at the mediation the parties entered into a binding agreement is so obviously untenable that it cannot possibly succeed and does not give rise to a serious question to be tried. It is for that reason 'frivolous' within RSC O 20 r 19(b).[35]
[35] Saffari [158].
Accordingly, pars 1E, 115, 116 and 123 of the Proposed SC would, if pleaded, be liable to be struck out. It follows that the plaintiff should not be given leave to file a pleading containing these allegations.
Should the plaintiff be given a further opportunity to attempt to plead a cause of action?
The effect of the conclusion in Part 5 is that the exception in SCA s 71(3)(b) is not enlivened.
The Proposed SC does not, in my view, contain any new factual assertion that would require me to form a view as to whether any further exception to SCA s 71 as discussed by the Court of Appeal should be implied (see [22]). The implied waiver pleading in Proposed SC par 106 to 114 is substantially the same terms as was rejected in Prichard DC[36] and Prichard CA (see [27] above). There is no new factual assertion which would form the basis of a wavier so as to require me determine the issue left open by the Court of Appeal.
[36] Prichard DC [104] - [120].
This leaves the position that SCA s 71 applies to the present case as set out in the Proposed SC.
The pleading of the second cause of action relating to the failure to promptly serve writ in the Share Transfer Proceedings is in substantially identical terms to that struck out in Prichard DC (see [29] above). These paragraphs should be stuck out of the Proposed SC for the same reason.
I have reviewed the Proposed SC and, like Judge Sweeney, annexe a table setting out the paragraphs of the Proposed SC which must be excised by operation of SCA s 71. The allegations which remain do not disclose any reasonable cause of action consistent with the writ.[37] It follows that I decline to grant the plaintiff leave to substitute her statement of claim in terms of the Proposed SC.
[37] RSC O 20 r 19(1)(a).
The final question is whether I should give the plaintiff a further opportunity to seek to draft a statement of claim which discloses a reasonable cause of action, within the terms of the writ, which does not plead any fact protected by SCA s 71. The alternative is to summarily dismiss her claim.
I am conscious that the power to summarily terminate proceedings 'must always be attended with caution'.[38] I am also conscious of the observations of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde:[39]
It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant … should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.
[38] Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J). See also: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99 (Mason, Murphy, Wilson, Deane & Dawson JJ); Shilkin v Taylor [2011] WASCA 255 [40] (Newnes JA, with whom Pullin & Buss JJA agreed).
[39] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ) (reference omitted). See also: Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ); Spencer v The Commonwealth of Australia [24] (French CJ & Gummow J).
This is the clearest of cases. In my view, the point has now been reached where the plaintiff has had a reasonable and sufficient, indeed given the guidance in Prichard CA, ample, opportunity to plead her case.[40] She should not be given any further opportunity to do so. The private interests of the defendants in having the claim finalised and the public interest in the efficient use of the resources of the court militate against giving the plaintiff a further opportunity to try and plead her claim.[41] I cannot see how the plaintiff, if given leave to re‑plead, would be able to plead a viable cause of action. Her complaint against the defendants is so inexorably linked with the mediation that it cannot be pleaded without infringing SCA s 71. The action must be summarily dismissed.
What are the appropriate final orders?
[40] Zaghloul [77].
[41] Zaghloul [77].
The appropriate final orders are:
1.The statement of claim filed 4 November 2020 be struck out.
2.The plaintiff be refused leave to file an amended or substituted statement of claim.
3.The plaintiff's claim be dismissed.
I will hear from the parties as to costs.
Annexure A
| Item | Paragraph Number | Deletion |
| 1 | 1B | Entirety |
| 2 | 1C | Entirety |
| 3 | 1E | Entirety |
| 4 | 19 | Entirety |
| 5 | 22 | Entirety |
| 6 | 28 | First sentence |
| 7 | 29 | Entirety |
| 8 | 30 | Entirety |
| 9 | 31 | Entirety |
| 10 | 33B | Entirety |
| 11 | 34 | Entirety |
| 12 | 35 | Entirety |
| 13 | 36 | Entirety except first sentence |
| 14 | 37 | Entirety |
| 15 | 38 | Entirety |
| 16 | 39 | Entirety |
| 17 | 40 | Entirety |
| 18 | 41 | Last three lines, beginning with 'plus another 6K…' |
| 19 | 42 | Entirety |
| 20 | 44 | Entirety |
| 21 | 45 | Entirety |
| 22 | 46 | Entirety |
| 23 | 47 | Entirety |
| 24 | 49 | Entirety |
| 25 | 50 | Entirety |
| 26 | 52 | Item 2, bullet point #3 in 'content of file note' section. Entirety of Item 2 'controversy/anomaly' section. Entirety of item 3. Entirety of item 4. Entirety of item 5. Entirety of item 6. Entirety of Item 7 'content of file note' section. |
| 27 | 53 | Entirety |
| 28 | 54D | Entirety |
| 29 | 55 | Entirety |
| 30 | 56 | Entirety |
| 31 | 57 | Entirety |
| 32 | 58 | First sentence and last sentence. |
| 33 | 60 | Entirety |
| 34 | 61 | Entirety |
| 35 | 62 | The words '5 days after the deadline (for accepting the offer)' and the last sentence. |
| 36 | 63 | The final subparagraph, beginning with 'the plaintiff would have had the opportunity…' |
| 37 | 64 | Entirety |
| 38 | 65 | Entirety |
| 39 | 66 | Entirety |
| 40 | 67 | Entirety |
| 41 | 68 | Entirety of second sentence, beginning with 'the plaintiff asserts that…' |
| 42 | 70 | Entirety |
| 43 | 71 | Entirety of final subparagraph, beginning with 'I still I have not heard back from Mark Fatharly…' |
| 44 | 72 | Entirety |
| 45 | 73 | Entirety |
| 46 | 79 | Entirety |
| 47 | 83 | Final sentence of first subparagraph beginning with 'which prevented the plaintiff from'. The words following the comma in the table under 24/5/2013 & Content (beginning 'client agrees to settle but...'. Entirety of table section under 2/7/2013 & Content. Entirety of table section under 2/7/2013 & Inconsistency. |
| 48 | 84 | Entirety of second sentence, beginning with 'the intention of the Plaintiff…' |
| 49 | 88 | Entirety of final subparagraph, beginning with 'She (the Plaintiff) thinks there's…' |
| 50 | 89 | Entirety |
| 51 | 92 | Entirety |
| 52 | 94 | Entirety of second subparagraph, beginning with 'I don't believe that you have actually…'. Entirety of forth subparagraph, beginning with 'why did this matter not settle…' |
| 53 | 95 | Entirety of table sections under the date 4/9/2013 |
| 54 | 99 | Entirety |
| 55 | 105 | Entirety |
| 56 | 106 | Entirety |
| 57 | 107 | Entirety |
| 58 | 108 | Entirety |
| 59 | 109 | Entirety |
| 60 | 110 | Entirety |
| 61 | 111 | Entirety |
| 62 | 112 | Entirety |
| 63 | 113 | Entirety |
| 64 | 114 | Entirety |
| 65 | 115 | Entirety |
| 66 | 116 | Entirety |
| 67 | 123 | Entirety |
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
EC
Associate to Judge Gething
8 AUGUST 2024
32
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