Smith v McCusker QC - [2001] WASC 217

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SMITH & ANOR -v- McCUSKER QC [2001] WASC 217

CORAM: MASTER BREDMEYER

HEARD: 30 JULY 2001

DELIVERED : 17 AUGUST 2001

FILE NO/S: CIV 1230 of 1995

BETWEEN: JAMES GARNETT SMITH
ELIZABETH ANNE SMITH
Plaintiffs
AND
MALCOLM JAMES McCUSKER QC
Defendant

Catchwords:

Pleading - Statement of claim - Pleading defects

Legislation:

Nil

Result:

Leave granted to file and serve a fresh minute of statement of claim

Category: B

Representation:

Counsel:

Plaintiffs: In person (Mrs E A Smith)
Defendant: Mr S S Sandhu

Solicitors:

Plaintiffs: In person
Defendant: Pullinger Readhead Stewart

Case(s) referred to in judgment(s):

Smith & Anor v McCusker QC & Another [2000] WASCA 320

Case(s) also cited:

Nil

MASTER BREDMEYER: This is an application by Mrs Smith for leave to replead a statement of claim in the form of a minute of proposed substituted statement of claim dated 15 June 2001.
By way of background, Mr and Mrs Smith initially sued Mr McCusker QC and another. The Smiths' application to file an amended writ and a substituted statement of claim was dismissed by Master Sanderson in September 1997. He refused leave for them to file a substituted pleading. On appeal to the Full Court the Full Court allowed the appeal in part against Mr McCusker only. The decision is Smith & Anor v McCusker QC & Another [2000] WASCA 320. In the course of those reasons the Full Court formulated 16 questions which they went on to answer in the judgment. Order 3 of the extracted orders was that the appeal be allowed (against Mr McCusker) "to the extent indicated by the answers to the questions formulated for the purposes of the appeal both of which are set out in the schedule to this order". The schedule consists of the 16 questions and answers in the reasons.
The defendant opposes the plaintiffs' pleading in the minute and I propose to consider those objections.
Paragraph 13 is objected to as not stating when the plaintiffs' solicitor, Mr Gilmour, wrote to the defendant seeking his opinion. I consider the plea is clear enough that the letter was written on 28 August 1986.
Paragraph 18 of the minute states:
"18. On the 28 August Mr Gilmour wrote a letter to the Defendant seeking to secure his retainer as Senior Counsel in the action against the bank and seeking his opinion on the matter."
This is said to be embarrassing because of the phrase "to secure his retainer as Senior Counsel". It is not as clear as it might have been, but nevertheless, I consider the letter, which I have not seen, will speak for itself and the defendant will not be embarrassed by it.
Paragraph 19 probably needs a few words to be added as follows:
"On the 28 August 1989 Mr Gilmour provided to the Defendant the Court documents ... ."
Paragraph 20 provides:
"20. The Defendant agreed and undertook to advise and act for the plaintiffs and to provide an opinion in the terms of the grant of legal aid."
I agree that this plea needs some elaboration. It should state whether the agreement was by letter, or by a telephone call to Mr Gilmour, or if it is to be inferred from the fact that Mr McCusker did later produce an opinion.
Paragraph 21 of the minute pleads the duty of care, as follows:
"21. In the premises at all material times the Defendant had a duty to exercise all due professional care, skill and diligence as a solicitor in relation to the business and affairs of the Plaintiffs and to undertake the following tasks."
and then follows a series of paragraphs numbered 22 to 40. I will quote but the first three of these:
"22.familiarise himself fully with the Plaintiffs' case against the bank;
23.to read and take into account all parts of his brief;
24. ensure that he had acquired a thorough understanding of the true issues of the Plaintiffs' case against the bank."
I consider pars 22 to 40 should be pleaded as particulars of par 21.
Paragraph 41 of the minute pleads the breach of the duties pleaded in par 21 etc, and is followed by pars 42 to 46. I quote from par 42 only:
"42. failed to familiarise himself fully with the Plaintiffs' case against the bank."
I consider pars 42 to 46 should be particulars of the breach of duty pleaded in par 41.
Paragraph 47 pleads:
"47. as a result of the failures and breaches of duty detailed in paragraph 41, 42 and 43, the Defendant placed undue emphasis in his opinion on the difficulties which the Plaintiffs would face in seeking to prove that they had relied on the budget."
The defendant seeks particulars or material facts of why this is so. I consider the plea is in order. It should refer to par 41 only. As previously stated, I consider pars 42 to 46 should be particulars of the breach pleaded in par 41. That being the case, sufficient particulars are given in what is now pars 42 to 46 to justify the plea that the defendant placed undue emphasis on the difficulties the plaintiffs would face in seeking to prove that they had relied on the budget.
Paragraph 48 pleads:
"48. As a result of the failures and breaches of duty pleaded in paragraphs 41, 42, and 44, the Defendant failed to point out in his opinion that the allegation in the Bank's defence, that the figures had been provided by the Plaintiffs, while true up to a point, was largely irrelevant to their case."
The phrase "while true up to a point" is said to be embarrassing. I agree with that. However, Mrs Smith in justification says that she is here pleading what Templeman J said at par 160(4). The Judge, at that paragraph, stated:
"(4)he therefore failed to point out that the allegation in the Bank's defence, that the figures had been provided by the Smiths, while true up to a point, was largely irrelevant to their case." (Emphasis mine.)
The word "therefore" is important in this paragraph because it impliedly refers to the earlier pars 160(1), (2) and (3) which read:
"160I have come to the conclusion, assuming the facts pleaded in the statement of claim to be true, it alleges that Mr McCusker was negligent in the following respects:
(1)he failed to read or to take into account that part of his brief which disclosed that the Smiths did not rely on the 1977 cash flow budget, but on the Bank to provide proper advice as to the implementation of the Smiths' proposal for the expansion of their farming activities;
(2)he therefore placed undue emphasis in his opinion on the difficulties which the Smiths would face in seeking to prove that they had relied on the budget;
(3)he failed to read or to take into account that part of his brief in which Mrs Smith explained that she and Mr Smith had provided only approximate figures to Mr Danks for inclusion in the cash flow budget, on the basis that they would not be held to those figures;"
The plea in par 47 should be a particular of par 41 and should follow pars 43 and 44 (which as said earlier should be particulars of par 41). That way the obscurity of the phrase "up to a point" is cured. It is because the Smiths did not rely on the 1977 case flow budget, but on the bank to provide proper advice as to implement the Smiths' proposal for expansion of farming activities, and because the Smiths had only provided approximate figures to Mr Danks.
Paragraph 49 pleads:
"49. As a result of the failures and breaches of duty pleaded in paragraph 41, 42 and 45, the Defendant failed to refer in his opinion to papers relevant to his opinion and the opinion gave the impression that he had not been provided with all he needed to provide a complete opinion."
The plaintiffs say that this plea comes from Templeman J's judgment at par 166(6) and par 163. The defendant states that the plea is vague and embarrassing. I agree with that criticism. What were the relevant papers which the defendant failed to refer to in his opinion? Some clue is given, for example, in the judgment at par 160(6):
"He failed to familiarise himself with that part of the brief in which it was explained how the actual costs for 1977 had exceeded the budget."
and in par 160(7):
"He failed to familiarise himself with that part of the brief in which Mrs Smith described how the application to the Rural Adjustment Authority came to be made thus explaining why as he put it in his opinion ... ."
Paragraph 49, of the minute in the latter part, refers to:
" ... the opinion gave the impression that he had not been provided with all that he needed to provide a complete opinion."
Some particulars need to be given of the relevant papers not referred to.
Objection is made to pars 51 to 59 on the ground that they are repetitious of in themselves and of earlier paragraphs. That is a fair comment. It is normally only necessary to plead breach of the duties of care once and then set out the particulars of those breaches. That is how it is done in par 160 of the judgment of Templeman J. He sets out seven aspects of negligence, in effect, breaches of the duty of care. The pleader in this minute has pleaded breach of the duty of care in par 41 and given details of that in pars 42 to 46 which, as previously advised, I consider should be shown as particulars. I ask what new breaches of duty are pleaded in pars 51 to 59 which are not already pleaded in pars 41 to 46? I consider pars 51, 52 and 53 and 54 are all saying the same thing in different words - that the defendant failed to consider the merits of the plaintiffs' case. That is very similar to par 42, that he "failed to familiarise himself fully with the plaintiffs' case against the bank". Nevertheless, I think it can stand as a new plea of breach.
Paragraph 55 pleads, as a matter of breach, that the defendant failed to see that the plaintiffs had not relied on the budget but on the bank to provide a suitable budget. I think that is a permissible plea, as it was so stated by Templeman J at par 160(5).
Paragraph 56 pleads that the plaintiffs had only provided approximate figures to Danks on the basis that they would not be held to them and therefore the bank's allegation that the plaintiffs provided the figures was largely irrelevant to the case. That plea can stand.
Paragraph 57 refers to the defendant's failure to consider "the effect of the actual figures for 1977". That could be better expressed as per Templeman J par 160(6):
"he failed to familiarise himself with that part of his brief in which it was explained how the actual costs for 1977 had exceeded the budget;"
Paragraph 58 refers to the defendant's failure to consider "how the application to the Rural Adjustment Authority came to be made". That is a repetition of par 46 and should be deleted.
Paragraph 59 pleads the defendant's failure to consider "how damages should be assessed and quantum". I consider that can stand. It is justified by reference to pars 164 to 166 of the judgment of Templeman J, although possibly falling outside the answer to question 2 which is, as previously stated, part of the Full Court orders.
Paragraphs 60 and 61 plead:
"60. In breach of the duties pleaded in paragraphs 21, 28 and 29 the Defendant failed to adequately review the pleadings.
61. As a result of the breaches pleaded in paragraph 60, the Defendant failed to recognise an inconsistency in the Plaintiffs' statement of claim against the Bank which would have been cured by admitting references to reliance on the budget and pleading reliance on the Bank to provide a proper budget."
Objection is taken to these two pleas on the basis that they are outside the Full Court's orders. I do not agree with that objection. I consider this plea is within the bounds of par 160(5) of the judgment where the Judge said that the defendant:
" ... failed to recognise an inconsistency in the Smiths' statement of claim against the Bank, which would have been cured by omitting references to reliance on the budget and pleading reliance on the Bank to provide a proper budget;"
I note, too, in par 54 of the judgment that the Judge considered that one of Mr McCusker's tasks was to review the pleadings in the action against the bank.
Paragraph 62 pleads:
"62. In breach of the duties pleaded in paragraphs 21 and 30, the Defendant failed to advise that an amendment was necessary deleting reference to reliance on the budget and pleading reliance on the Bank to provide a proper budget."
This is said to be an idle plea - that no remedy flows from it. I think it can stand. It is a corollary to the plea in par 61 and it is a point made by Templeman J at par 160(5). What follows from it? I suppose if the pleading was amended, as suggested, to de‑emphasise the plaintiffs' failure to provide a proper budget - making them the authors of their own misfortune - and to emphasise the bank's failure to provide a proper budget, the opinion would have looked more favourable to the Legal Aid Commission and it might not have terminated the legal aid.
Paragraph 63 pleads:
"63. As a result of the breaches pleaded in paragraph 62 the statement of claim was not amended and the issue of the inconsistency contained within it was never addressed in the opinion."
This can stand as logically flowing from pars 61 and 62.
Paragraph 64 provides:
"64. In breach of the duties pleaded in paragraphs 21, 31, 32, 33 and 34 the Defendant failed to provide a full opinion as to the merits, to refer to papers relevant to the opinion and to refer to relevant authorities in his opinion."
This is a repetition of earlier paragraphs, insofar as it refers to a failure to provide a full opinion on the merits, and to refer to papers relevant to the opinion. The reference to failure to refer to relevant authorities should be deleted. It does not form part of the summary of negligence made by Templeman J.
Paragraph 66 of the minute is a plea of the defendant's failure to properly consider the quantum of damages. I consider the plea is justified by pars 164 to 166 of the Full Court judgment.
I consider par 67 is in order, except the reference to "did not contain adequate analysis of authorities", should be deleted as not forming part of the Full Court's judgment.
I consider par 69 of the minute is in order.
I consider par 70 can stand. It does contain some repetition but raises no new matters and could readily be dealt with in a defence.
Paragraph 71 pleads:
"71. The negative opinion provided by the Defendant was unfavourable to the Plaintiffs. But for the negligence it would have been more favourable."
Then follows pars 72 to 75. I consider they should be shown as particulars of par 71.
Paragraph 76 is in order. It is the plea that the negligent opinion provided by the defendant caused the plaintiffs' to have their legal aid terminated, meaning that they lost the opportunity of having a trial of their action against the bank.
Paragraph 77 is that:
"77. The Defendant's opinion was provided to the Legal Aid Commission on or about 23 March 1989."
That is a reference to the lateness of the opinion and is said to be outside the orders allowed by the Full Court. I fail to see that. I consider it is within the question and answer 4 given by the Full Court, to the effect that the defendant delayed unreasonably in delivering his opinion so that the appellants thereby suffered loss. The Full Court was, of course, dealing with a pleading. The result of that answer is that they think that contention is arguable.
Paragraph 78 pleads:
"78. The solicitor in charge 'Extension Services' concluded that the opinion was properly based and drew the proper conclusions."
That is embarrassing. What were the proper conclusions the solicitor drew? They should be stated.
Paragraph 79 pleads:
"79. The Legal Aid Commission relied heavily on the opinion over the next 5 years. As a consequence of the Defendant's negligence later counsel and experts and the Legal Aid Commission formed wrong conclusions about the basis of the R & I matter which the Plaintiffs tried to correct on numerous occasions."
I consider the plaintiffs need to give particulars of the latter phrase: "which the Plaintiffs tried to correct on numerous occasions". Mrs Smith told me that she and her husband did not accept the defendant's opinion and lobbied to get other advice. I think they spoke with, or perhaps the Commission spoke with, Darryl Williams QC, David Van Zalm and Peter Nisbet QC. And I think she said they got one other written opinion. If so, particulars of how they tried to correct the wrong conclusions in the defendant's opinion, should be given.
I consider pars 80 and 81 are in order. Paragraph 81 pleads:
"81. On 9 April 1994 in reliance on the opinion and in view of the diminishing availability of legal aid the Legal Aid Commission terminated the Plaintiffs' grant of legal aid."
That is said to be embarrassing because of the words "in view of the diminishing availability of legal aid [money]". I do not think that is embarrassing or raises any false issue. I suspect that the letter terminating legal aid referred to that matter and that is sufficient to justify the plea.
Paragraph 82 pleads:
"82. If there had not been negligence and the opinion had been more favourable, legal aid would not have been terminated."
That is a catch‑all plea and is not embarrassing. It is a matter for argument whether the diminishing availability of legal aid would - by itself - have terminated legal aid, even with a favourable opinion from the defendant.
I consider the rest of the pleading is in order.
I propose to give the plaintiffs an opportunity to replead to give effect to these reasons. I will hear the parties on the terms of the order.