Raphael v Symonds

[1999] HCATrans 293

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S199 of 1998

B e t w e e n -

MARETA GRACE RAPHAEL

Applicant

and

CEDRIC REUBEN SYMONDS

Respondent

Application for special leave to appeal

GAUDRON ACJ
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 SEPTEMBER 1999, AT 9.42 AM

Copyright in the High Court of Australia

MR D.E. GRIEVE, QC:   May it please your Honours, I appear with MR D.E. BARAN for the applicant.  (instructed by Solomon Garland Partners)

MR M.D. BROUN, QC:   I appear with MS P. HANNA for the respondent.  (instructed by Mark Phillip Symonds)

GAUDRON ACJ:   Yes, Mr Grieve.

MR GRIEVE:   To begin with, in our submission, the judgment of the Full Family Court is demonstrably wrong in all respects.

GAUDRON ACJ:   Yes, that seems to be the problem in this sense, that if you say “in all respects” that must go to the question whether or not the court’s power is enlivened on grounds that the agreement was not fair or reasonable.

MR GRIEVE:   The primary judge had no difficulty - - -

GAUDRON ACJ:   No, I am not talking about the fact.  I am talking about the rule itself.

MR GRIEVE:   Yes.

GAUDRON ACJ:   Well, what does the rule say?

MR GRIEVE:   The rule under which the proceedings were instituted?

GAUDRON ACJ:   Yes.

MR GRIEVE:   I will just get Mr Baran to dig it out so that I can tell your Honours precisely.  The reason why we advanced that introductory submission is simply to put the proposition first and foremost that our client adequately meets the test posed by section 35A(b).  We then turn to subparagraph (a) and point essentially to several matters, primarily, the issue concerning what has been called the Anshun principle.  Before I get on with that - - -

GAUDRON ACJ:   Yes.  I think we need to go to the rule.

MR GRIEVE:   Yes, indeed.

GAUDRON ACJ:   It comes from the Family Court Rules pursuant to which the application was instituted.

MR GRIEVE:   I appreciate that.  My junior has pointed out the text of it and that is in the judgment of the majority in the intermediate appellate court at pages 18 and 19 which will be application book – no, I am sorry, I have been misled.

GAUDRON ACJ:   I think it is referred to in the judgment of Justice Finn which mysteriously did not find its way into the application book.

MR GRIEVE:   I understand that and I apologise for that on behalf of those instructing us.  Yes, indeed, it is, and it is at pages 18 and 19 of that judgment.  In particular, rule 8A(1) which appears towards the foot of page 18, which was then in force, enabled - - -

GAUDRON ACJ:   What you have to look at is 8(2)(c), I think.

MR GRIEVE:   8A(2)(c)?

GAUDRON ACJ:   8(2)(c), is it?  No, sorry, 8(3)(c) which says:

the agreement may be enforced or set aside in the same manner and on the same grounds as any other agreement.

MR GRIEVE:   Yes, indeed.

GAUDRON ACJ:   Indeed.  Now, is it the law that any agreement can be set aside because it is not fair and reasonable?

MR GRIEVE:   In our respectful submission, as between a solicitor and a client - - -

GAUDRON ACJ:   That is not what the rule says, though, is it?

MR GRIEVE:   The rule says so, we submit, in the context in which it arises; that context being reference to an agreement being an agreement between a solicitor and his or her client.  The rule does not purport to have any wider application than that.

GAUDRON ACJ:   There is a difficulty with this rule, is there not?  Let it be taken that what rule 8(3)(c) does is pick up the general law with respect to contracts.

MR GRIEVE:   Yes, as between solicitors and clients.

GAUDRON ACJ:   Well, that is not what it says.  You see, if I read it correctly – I am sorry to do this to you.  I know you have come here to argue other points, but if I read the decisions correctly, one basis on which it was said that you could set aside costs agreements on the grounds of whether they were fair and reasonable was that the cross-vesting jurisdiction had picked up the general power of the Supreme Court with respect to the supervision of solicitors, if you trace it back to its origins.  Well, cross‑vesting has gone.

MR GRIEVE:   We know that.  I was present to see its demise.  Even if that is correct, even if that is the way in which one gets there, in our submission, the Family Court would have dehors the cross-vesting jurisdiction an inherent power over practitioners who appear before it.

GAUDRON ACJ:   It may, except to the extent it is cut down, curtailed, limited by rule of court, and there is a real question as to the meaning and effect of rule 8(3)(c), is there not?

MR GRIEVE:   In our submission, if there is, it is a question of public importance and general application.

GAUDRON ACJ:   It may be, but this case was - - -

MR GRIEVE:   Which warrants the grant of special leave.

GAUDRON ACJ:   It may be, but that is not what you come here to argue.

MR GRIEVE:   No, indeed, that is true.

GAUDRON ACJ:   And the case proceeded on an assumption, did it not?

MR GRIEVE:   The case below?

GAUDRON ACJ:   Yes.

MR GRIEVE:   Yes, most assuredly it did.  That assumption was not challenged by the respondent, either at first instance or on appeal.

GAUDRON ACJ:   Well, he sought to challenge it on appeal but was precluded from so doing because it had not been raised below, is that not right?

MR GRIEVE:   That is right.  We submit that even if we have not addressed that question in the application for special leave - - -

GAUDRON ACJ:   No, it is not a question whether you have addressed that question, it is a question whether, given the assumption on which the case proceeded, this is a suitable vehicle because on one reading of rule 8(3)(c) there may be a discretion.  On another reading, it may simply pick up the general law, in which event there would be no discretion.

MR GRIEVE:   If it picks up the general law, we submit that - - -

GAUDRON ACJ:   As would apply to any other agreement, the general law with respect to contracts.

MR GRIEVE:   Yes.  Well, we would, with respect, accept that but either way it is a question which ought to be resolved.  The fact that the case may have proceeded on an assumption below does not, in our submission, preclude its consideration by this Court on appeal.  We would submit it comes within the exception to the rule in Coulton v Holcombe.

GAUDRON ACJ:   No, it would not.  It certainly would not.  It certainly would not.  Depending on what view you take of rule 8(3)(c), there could very well arise the necessity for further evidence.

MR GRIEVE:   This, in our submission, though, becomes, in effect, an obverse application to the rule in Coulton v Holcombe.  At no stage did the respondent to this application, at trial level, endeavour to raise this point in the interests of constructing an evidentiary basis upon which the point may be reviewed.  In our submission, it would be odd, in the extreme, for the applicant to be precluded from maintaining her rights of appeal from the intermediate appellate court’s judgment by reason of the fact that the respondent did not elect to lay a basis at trial upon which he may have wished to adduce further evidence.  Ordinarily, the rule in Coulton v Holcombe, of course, goes against the party who seeks on appeal to raise a new point.  In this case, the only party who could attempt to do that would be the respondent and he has not done so and did not do so at first instance.  It is rather difficult, we submit, to see how, in those circumstances, our client could be, as it were, criticised for not having invited the respondent ‑ ‑ ‑

GAUDRON ACJ:   No, but you are seeking special leave.

MR GRIEVE:   I understand.

GAUDRON ACJ:   Yes, and you have to show that it is a suitable vehicle.

MR GRIEVE:   Indeed.

GAUDRON ACJ:   And the questions you want to agitate may have no relevance if the assumption upon which the case was conducted falls away.

MR GRIEVE:   Yes, but that in itself raises a question, namely, whether or not that assumption was valid.  We would be entitled, we submit, if the respondent to the appeal raised the point, to resist it by contending that the assumption was valid.  That would raise an issue which, in our submission, would be entirely appropriate for this Court to consider, along with the other issues that we do wish to agitate.

We submit that in relation to those other issues, particularly the Anshun point, there could be, with respect, little doubt that that, having regard to the debate that has taken place since Anshun was decided in 1980, is a matter upon which this Court’s further consideration - - -

GAUDRON ACJ:   It does not seem to be a debate that has taken place since then.  It seems to be a debate that has taken place since the decision of the Court of Appeal in Tanning v O’Brien, which decision was, of course, set aside on appeal in this Court, I think, was it not?

MR GRIEVE:   No, it was affirmed.

GAUDRON ACJ:   Affirmed?

MR GRIEVE:   Yes.

GAUDRON ACJ:   But not on that ground.

MR GRIEVE:   No, that is true.

GAUDRON ACJ:   Not on that ground at all.

MR GRIEVE:   Although, as we read it, there was nothing said in the judgments of this Court in Tanning that cast doubt on what the Court of Appeal had said about it.

GAUDRON ACJ:   There was not anything said to support it either.

MR GRIEVE:   Fair comment, if I may say so.

GAUDRON ACJ:   But, again, you see, if I may interrupt you again – I am sorry to do this – if “may” in the rule confers a discretion, one would think the extended notion of Anshun was a matter properly to be taken into account in the exercise of discretion.

MR GRIEVE:   Yes.

GAUDRON ACJ:   So, again, you get back to what is this power that is conferred on the court by rule 8(3)(c).

MR GRIEVE:   If the point were to be agitated, we would submit that the word “may” is mandatory or at least directory in the sense that if the agreement is shown to be either unfair or unreasonable or both, then “may” would mean “shall”:  it shall be set aside.  On the other hand, if the agreement is demonstrated not to have been either unfair or unreasonable, the “may” becomes directory in the sense that upon the application of the solicitor the court shall enforce it, and that, we submit, would align the rule with the general law and, as it were, not introduce some new or novel point which would trigger the application to the extended Anshun doctrine.  But that is a matter that could be amply discussed on the hearing of the appeal.

It is a pure question of construction.  It does not depend upon any evidentiary foundation and that is why I put earlier that it falls within the exception of the rule in Coulton v Holcombe.  For that reason, that issue does not expose this case as an inappropriate vehicle.

If the assumption was made - it was an assumption that was made, as it were, tacitly - it was not assumption that was made on any express basis that was accepted by the parties so as to have a bearing or influence upon the course of the evidence which they chose to adduce.  I would not apprehend that our friends could say or suggest that had the assumption not been made, there was a possibility that they would have wished to adduce any further or different evidence.  That, of course, is a fairly low threshold.  It is the basis or at the centre of the Coulton v Holcombe test, but one must ask the question what other evidence could they conceivably have desired to adduce.  The solicitor was the only relevant witness and he gave his account comprehensively.  For those reasons, we respectfully submit that that problem, if it is a problem, does not stand in the way of a grant of special leave.

So far as the Anshun point is concerned, Mr Baran prepared a precise which was lodged with the Court yesterday which demonstrates the degree of discussion that has taken place either since Anshun or at least since Tanning.  We submit that, for three reasons, leaving aside the matter that has just been discussed, this case is an appropriate vehicle for the reconsideration of the Anshun question.  First, it represents - - -

GAUDRON ACJ:   Why does it need reconsidering?  The Anshun principle, as stated in this Court, is not ambiguous.  The only question here is the application of it, is it not?  It is not a question of reconsidering it.

MR GRIEVE:   I suppose that is a better way of putting it but the debate that has arisen is whether the test is “could” or “should”.  The court here seems to have – the intermediate appellate court, at least – approached the matter on the basis that “could” is sufficient.

There is one incidental matter which makes this an appropriate vehicle and that is that in a procedural sense it raises the question of the way in which the Anshun principle can apply to proceedings in courts where no pleadings are required such as is the case in the Family Court.  Here, as in all proceedings in the Family Court, all there was was an initiating process supported by various affidavit evidence, somewhat similar to the approach taken in the Equity Division of the Supreme Court in many matters.  It is not always apparent to discern with precision in those circumstances quite what cause or causes of action the plaintiff is invoking.

GAUDRON ACJ:   I do not know why we are talking about a cause of action at all.  On one view, you might be talking about breach of trust for which the limitation period is six years.  On one side, you might simply be talking about application to set aside a contract founded in general equitable principles.

MR GRIEVE:   Yes.

GAUDRON ACJ:   Well, is that a cause of action?

MR GRIEVE:   It is not a cause of action at law, of course, but it is nonetheless a justiciable claim.  But its formulation - - -

CALLINAN J:   Which can lead to a final judgment.

MR GRIEVE:   Of course.

GAUDRON ACJ:   Yes.  What does the Limitation Act say about that?

MR GRIEVE:   In our submission, the Limitation Act does not say anything express at all.  Those provisions of it to which our friends make reference, namely sections 47, 48, 49 and 50, are in no sense applicable.  In each case they talk about “breach of trust, trust property” and the like.  This case, if it can be properly formulated, is a claim by a client against a solicitor for breach of fiduciary duty.

GAUDRON ACJ:   I do not know why.  I do not know why.  If there were a claim ultimately to be made - although it does not seem to have been made

at this stage, the ultimate claim would be for breach of trust, for dealing with trust moneys in a way to which he was not entitled.

MR GRIEVE:   Yes, I understand.

GAUDRON ACJ:   But no such claim has yet been made.

MR GRIEVE:   That is certainly so.  The claim that has been made to date is that the solicitor breached his fiduciary duty not to prefer his own interests to those of the clients.

GAUDRON ACJ:   No, no, it is not.  The claim that is made – it was not the way on which you put your case.  Well, that was not the way in which you succeeded.  The claim made – there was no claim made.  An application has been made to set aside an agreement.

MR GRIEVE:   Correct.

GAUDRON ACJ:   One needs to know, surely, before one can discuss any of these issues precisely, the nature of that application and the power that it invokes.

MR GRIEVE:   The source of it was the rule and - - -

GAUDRON ACJ:   Yes, the source of the – well, it is the rule.  The source of the court’s power is the rule but what is the law to be applied?  That is the real question.

MR GRIEVE:   The law to be applied, in our submission, is the general law which applies to the relationship between solicitor and client.  The Family Court has jurisdiction to apply that law at least under the accrued jurisdiction principles, the issue arising in connection with proceedings to do with proceedings under that Act.  The Family Court, we submit, undoubtedly must be seen to have disciplinary jurisdiction over those who practice before it.

GAUDRON ACJ:   This is not a question of disciplinary jurisdiction.

MR GRIEVE:   Those are our submissions, your Honours.

GAUDRON ACJ:   Yes, Mr Broun, we need not trouble you.

The application at first instance was conducted on the basis that there was power in the Family Court to set aside a costs agreement if it is not fair and reasonable.  The precise nature of the power conferred by the relevant rule of court is a question that, in an appropriate case, might attract the grant of special leave to appeal.  The question whether and in what circumstances that power can and/or should be exercised can necessarily only be answered by an analysis of the power.

In the context of the assumption made at first instance, the propositions which the applicant seeks to advance in her application to this Court appear to be fairly arguable.  However, the assumption may not be valid.  In these circumstances, the present case is not a suitable vehicle for the grant of special leave to appeal.  Accordingly, the application is refused.

Mr Broun, we would not be minded to make an order for costs in this case unless you wish to persuade us to the contrary.

MR BROUN:   Well, your Honours, only that the matter has gone on so long.  It has been such - - -

GAUDRON ACJ:   The matter has gone on so long, yes. 

MR BROUN:   That is, in substance - - -

GAUDRON ACJ:   Neither party can be held responsible individually for the matter having gone on so long.

MR BROUN:   If your Honours pleases.

GAUDRON ACJ:   The application is simply refused.  No order as to costs.

AT 10.06 AM THE MATTER WAS CONCLUDED