Quill v Smith and Willmott

[2014] TASSC 45

[2014] TASSC 45

COURT:  SUPREME COURT OF TASMANIA

CITATION:                  Quill v Smith & Willmott [2014] TASSC 45

PARTIES:  QUILL, Robyn
  v
  SMITH, Michael
  WILLMOTT SC, Michael

FILE NO:  204/2014
DELIVERED ON:  21 August 2014
DELIVERED AT:  Hobart
HEARING DATE:  18 August 2014
JUDGMENT OF:  Holt AsJ

CATCHWORDS:

Professions and Trades – Lawyers – Duties and liabilities – Counsel and client – Negligence – Immunity from suit – Out of court work – Proceedings settled by consent judgment – Whether agreement as to particular terms of settlement affected conduct of the case in court.

Giannarelli v Wraith (1988) 165 CLR 543 and D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 applied.

Stillman v Rushbourne (2014) NSWSC 730 not followed.

Aust Dig Professions and Trades [1150]

REPRESENTATION:

Counsel:
             Plaintiff:  S B McElwaine SC
             First & Second Defendants:          M E O'Farrell SC  
Solicitors:
             Plaintiff:  Shaun McElwaine + Associates  
             First Defendant:  K & L Gates
             Second Defendant:  Sparke Helmore  

Judgment Number:  [2014] TASSC 45
Number of paragraphs:       14

Serial No 45/2014
File No 204/2014

ROBYN QUILL v MICHAEL C SMITH and MICHAEL WILLMOTT SC

REASONS FOR JUDGMENT  HOLT AsJ
  21 August 2014

1. The plaintiff has sued her former solicitor and her former barrister for damages for negligence and breach of retainer in respect of their conduct of litigation on her behalf.  The defendants say that they are immune from suit and accordingly they have applied for the summary termination of the proceedings. 

1. In brief summary and so far as is relevant, the allegations in the statement of claim are as follows.  A testatrix was the owner of a farm at Ross in Tasmania.  She also held two licences to take water used in the conduct of farming operations.  The plaintiff wanted the farm transferred to her.  To achieve this she brought proceedings under the Testator's Family Maintenance Act 1912 and brought an action claiming that she had a beneficial interest in the farm under either an express trust or a constructive trust. In 2006 she retained the first defendant as her solicitor. In 2007 she retained the second defendant as her barrister. In 2008 the defendants represented the plaintiff at a mediation conference. Terms of settlement were agreed. One of the terms was that the farm would be transferred to the plaintiff absolutely. There was no mention of the water licences. Orders to give effect to the settlement were agreed and presented to a judge who made orders in terms of the agreement. At no time did either of the defendants give advice concerning the water licences. The allegation of negligence is a continuing failure to give advice relating to the water licences starting from the initial retainers and continuing through to the mediation and agreement as to the terms of settlement. If the licences had been taken into account they would have formed part of the settlement negotiations and the plaintiff would have insisted upon a transfer of the licences to her as part of the terms of settlement and absent agreement would have pursued her case in court. The value of the farm is less than it would have been with accompanying water rights.

1. The advocate's immunity extends to work done out of court which leads to a decision affecting the conduct of the case in court.  In Giannarelli v Wraith (1988) 165 CLR 543 Mason CJ said at 559 – 560:

"Is the immunity to end at the courtroom door so that the protection does not extend to preparatory activities such as the drawing and settling of pleadings and the giving of advice on evidence? To limit the immunity in this way would be to confine it to conduct and management of the case in the courtroom, thereby protecting the advocate in respect of his tactical handling of the proceedings. However, it would be artificial in the extreme to draw the line at the courtroom door. Preparation of a case out of court cannot be divorced from presentation in court. The two are inextricably interwoven so that the immunity must extend to work done out of court which leads to a decision affecting the conduct of the case in court. But to take the immunity any further would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity. I would agree with McCarthy P in Rees v Sinclair (1974) 1 NZLR 180 where his Honour said (at p187):

'... the protection exists only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing'. 

1. The statement of the extent of the immunity in Giannarelli was confirmed in D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1.

1. In D'Orta-Ekenaike it was explained that the immunity exists along with the immunity from suit which applies to judges and witnesses. The function of the judicial branch of government is the quelling of controversies by the ascertainment of facts and the application of the law. As a matter of principle, controversies once resolved are not to be reopened except in a few narrowly defined circumstances. The advocate's immunity exists because without out it controversies could be re-litigated as "an inevitable and essential step in demonstrating that an advocate's negligence in the conduct of litigation had caused damage to the client". The plurality at pars[43] – [45].

1. The circumstances in which proceedings might be summarily terminated were considered in Spencer v The Commonwealth (2010) 241 CLR 118. There French CJ and Gummow J said at pars[24] and [25]:

"The exercise of powers to summarily terminate proceedings must always be attended with caution.  That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130 per Barwick CJ or on the basis that the action is frivolous or vexatious or an abuse of process Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99 said:

'The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.'

More recently, in Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 275 Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde (2000) 201 CLR 552 at 575-576 which included the following:

'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 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130 per Barwick CJ, 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.'

…

Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter.  Existing authority may be overruled, qualified or further explained.  Summary processes must not be used to stultify the development of the law.  But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application … could justifiably conclude that the proceedings had no reasonable prospect of success." 

1. Counsel for the defendants placed heavy reliance on Stillman v Rushbourne [2014] NSWSC 730. That case concerned a claim by a former client of a firm of solicitors that he had been negligently advised to settle proceedings to his detriment at a mediation. The terms of settlement provided for the entry of judgment and judgment was accordingly entered. Davies J concluded that advice as to settlement followed by consent judgment so clearly falls within the immunity that the claim should be dismissed summarily on the plaintiff's own pleadings.

1. In reaching his conclusion Davies J considered a statement in D'Orta-Ekenaike at par[166] where McHugh J said:  "… it is possible to sue a practitioner for the negligent settlement of proceedings …".  Davies J said at par[26] that this statement did "not sit easily" with other parts of the judgment of McHugh J.  With respect, in my opinion, what McHugh J said was conformable with the rest of his reasons.  His focus on the connection between the impugned act or omission of the advocate and conduct of the case in court and the way he expressed his views were not incompatible with the view that a practitioner might be sued for the negligent settlement of proceedings, even where the settlement includes the entry of agreed orders.

1. Here, at least arguably, there was nothing that happened in court which might be re-litigated by the pursuit of the plaintiff's present action.  All that happened in court was that the judge was asked to make orders in the terms of an agreement.  Presumably, all that the judge did was to satisfy herself that there was jurisdiction to make the orders and then acted by making orders in the terms agreed.  If the agreement had included a transfer of the water licences there would be no alteration to the conduct in court.  The judge would have been asked to make the agreed orders and would have done so.  Had there been no agreement at the mediation there would have been no attendance in court at all for the purpose of seeking the making of orders with the consent of the parties. 

1. Francis v Bunnett [2007] 18 VR 98 has similarities with the present case. There, a client's claim had been settled with the entry of a consent judgment. The client later sued her lawyer claiming, amongst other things, that if the lawyer had given proper advice the case would not have been settled on the terms which led to the judgment. It could have been pursued at a trial and damages far in excess of those agreed might have been recovered. Lasry J considered Giannarelli and D'Orta-Ekenaike.  His Honour, in deciding an appeal by way of a rehearing de novo, found himself unable to agree with the original decision to give summary judgment.  He concluded at pars[50] and [51]:

"I do not, and should not, express any concluded view about the debate I have heard  concerning advocates’ immunity but I find myself unable to say that the arguments of the plaintiff fall within any of the categories referred to by Charles JA in Coles Myer Ltd v Bowman – ie that the claim is so clearly untenable that it cannot possibly succeed or that if the plaintiff stated her own case on the face of the pleading the connection between the facts alleged and the claims which are made are bound to fail.

In my view, in this case the plaintiff is entitled to have this action dealt with at trial.  It may be that after hearing the evidence and hearing the submissions similar to those I have heard, the trial judge will conclude that advocates’ immunity applies and that that is a complete answer to the substantial portion of the plaintiff’s claim.  But I am not prepared at this stage to deprive her of her right to have that trial pursuant to Order 23, given that I consider that the argument sought to be made by the plaintiff is tenable and not necessarily bound to fail."

1. A recent example of a case concerning whether a defence based on advocate's immunity might be determined at the pleading stage is Norris v Pedder (No 2) [2014] TASSC 29. There, Blow CJ considered that it was at least arguable that the immunity did not apply where the ultimate court proceedings did not involve the determination of any question of fact or law in relation to the client's rights. He said at pars[17] and [18]:

"The particulars of the alleged negligence all relate to omissions in relation to the appellant's unsuccessful application for an extension of time.  It is at least arguable that none of those omissions, if they occurred, had the requisite connection with the conduct of that application in court.  The decision dismissing that application was not one by which a judge determined any question of fact or law in relation to the appellant's rights.  It involved the exercise of a discretion.  There is no reason to think that an action for negligence against Brian Hilliard Pty or Mrs Howroyd based on the particulars now pleaded might involve any suggestion that the order dismissing the application was not the most appropriate order for Crawford CJ to have made on the evidence before him.

It follows that it is at least arguable that Brian Hilliard Pty and Mrs Howroyd would have no immunity from suit; that the principle of immunity from suit does not make the amendment obviously futile; and that it was rightly allowed." 

1. The plaintiff's allegations in this case extend back to a failure to advise commencing a considerable time before the mediation and the entry of the agreed orders.  Such failure may arguably be too far removed from the conduct of proceedings in court to be covered by the immunity.  Coshott v Barry [2009] NSWCA 34 is an example of a case where the initial advice of an advocate was not protected by the immunity. Coshott was an appeal from a decision in which a claim against a solicitor for failing to advise that the relief sought in a proceeding should be confined to an order for the taking of accounts in common form as between mortgagee and mortgagor was rejected for a number of reasons including that the solicitor had the benefit of the advocate's immunity.  Ipp JA, with whom Beazley JA and Campbell JA agreed said at par[62]:

"In my opinion, this finding by his Honour went too far. Mr Coshott’s case was that Mr Barry breached his duty to advise virtually from the inception of the retainer. Such an alleged failure would be too far removed from the actual conduct of the trial to be covered by the doctrine of advocate’s immunity. I do not think that, when the retainer commenced, a failure to advise as alleged could be regarded, properly, as leading to a decision affecting the conduct of the case in court (Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 at 560 per Mason CJ). The period from the time the retainer commenced to the trial itself was too long for the requisite connection to the conduct of the case in court to be established."

1. The answer to the question, whether the defendants have the benefit of advocate's immunity in relation to the plaintiff's claim is not so clear as to justify summarily terminating the proceedings on the pleadings and denying the plaintiff of the opportunity to present her case in the ordinary way at a trial. 

1. For these reasons the defendants' applications for summary termination of the proceedings will be dismissed.