Stefanovich v Curran

[1989] HCATrans 91

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl48 of 1988

B e t w e e n -

MILENKO STEFANOVICH

Applicant

and

THOMAS SYDNEY CURRAN, KENNETH

JAMES AUSTIN, JOHN FRANCIS

HEAZLEWOOD (trading as Gates

Moffitt & Co)

Respondents

Application for special leave

to appeal

MASON CJ

Stefanovich
MR B. MORRIS:	May it please the Court, I appear for the

BRENNAN J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 APRIL 1989, AT 2.47 PM

Copyright in the High Court of Australia

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applicant. (instructed by T.H.W. Rybak)

MR C.S.C. SHELLER, QC: If Your Honours please, I appear for

with MR R.A. GRAY for the respondents. (instructed by

Ebsworth and Ebsworth)

MR MORRIS:  Your Honours, this is an application which was

originally couched in one seeking leave for an

extension of time to lodge the seek leave to appeal

but when one reads the appeal it says that the decision

was given on 17 October 1988, yet the judgment appears
to be dated 24 October 1988 and it therefore was in time.
So, in the circumstances, Your Honours, I do not think

I need to make that application for the extention of

time.

MASON CJ: Yes.	You ca.n··proceed to the grounds for special leave.
MR MORRIS:	Your Honours, this is an application for special

leave based upon an action for negligence against a

solicitor where the statement of claim was lodged out

of time. The cause of action arose from - - -

MASON CJ:  We are familiar with the circumstances, so you might

proceed immediately demonstrating why it is a case for

special leave.

MR MORRIS: If Your Honour please. Your Honours, we would maintain

it is a matter for special leave because, firstly,
the Court of Appeal has dismissed, we would say rather

peremptorily, what was a pre-existing decision "'Which

had been followed throughout New South Wales and the

common law generally as in WIFFEN V BAILEY AND ROMFORD

URBAN COUNCIL. It is quoted:

"It is well established that the difference

between solicitor and client costs and

party and party costs is not legal damage".

That has been followed in New South Wales, Your Honours.

That had been followed in RITCHIE V BRITISH INSULATED
CALLENDERS CABLES, (1960) 77 WN (NSW).	His Honour,

the learned President, in delivering his judgment

said that:

No authority was cited by his Lordship

for this surprising assertion -

after the statement that -

"It is well established that the difference

between.solicitor and client costs and

party and party costs is not legal damage".-

and said:

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No other member of the Court referred to to it. ·_No later or other authority could

be found which supported the assertion.

Yet, Your Honours, there are a series of cases, which

are in the application book dating from 1811 which

consolidate the proposition, were referred to

in the judgment in WIFFEN V BAILEY and subsequent

cases are cases in which WIFFEN V BAILEY has been

referred to.

MASON CJ:  Was the Court of Appeal put in possession of all these

authorities?

MR MORRIS:  On my instructions, no, Your Honour, and if one

reads the transcript it appears that that was not

so.

MASON CJ:  Why should we take the case on, in these circumstances,

when the party did not take advantage of presenting to
the Court of Appeal the argument which it now wishes

to present to us?

MR MORRIS:  Your Honour, only that the Court of Appeal placed,

I would submit, in their judgment, considerable emphasis and prominence upon the fact that the date of damage

on which it is alleged that the plaintiff suffered his

damage was the day on which the adjournment

of the common law proceedings was consented to. Now,

it is argued by the plaintiff that the consent was not

of his instructions, it was against his instructions.

If the cause of action arose on the date that the

adjournment was obtained, the Court of Appeal placed

the damages arising from the fact that solicitor and

client costs were incurred on that day. WIFFEN V BAILEY

says that solicitor and client costs do not found a

legal damage, therefore, Your Honours, the decision

as based in the Court of Appeal is based upon a

premise that damage arose through solicitor/client

costs and that formulated the cause of action.

We would be submitting, Your Honours, that there are

other dates later and in time on which the cause of

action arises and which are in time.

So, in the first instance, Your Honours, we

would be submitting and it was submitted - if not

all the authorities, Your Honours, the principle was

submitted - that legal damage had not arisen on 3 August when the adjournment was consented to.

GAUDRON J: Notwithstanding the loss of opportunity to have the

matter proceed on that day?

MR MORRIS: Well, we cannot quantify that. This is a claim for

that was thrown away. The loss of opportunity arose, really, later when the judgment subsequently obtained could not be enforced.

economic loss and the only economic loss that the cost

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BRENNAN J:	Why was there no loss of opportunity on the day on which the adjournment was consented to?
:MR. MORRIS:	The loss of opportunity was only that the matter

could not be heard or was not heard.

BRENNAN J:	So, the plaintiff did not get his money.
:MR. MORRIS:	The plaintiff did not get his money then but the

plaintiff could not later enforce his judgment,

the judgment he subsequently obtained, because of

the passage of time both defendants had died; one

had died, one had fled the jurisdiction and ultimately,

the second one died.

BRENNAN J:  Had not the plaintiff lost something by not getting

his money that day?

:MR. MORRIS:	Yes, he would have lost his opportunity - if he had got on for hearing - - -
BRENNAN J:	He would have lost his money.
:MR. MORRIS:	Well, he would have lost a judgment if he were

successful but he could not say he lost his money until

he obtained a judgment, and in that respect we would

say the cause of action does not arise until, on

one basis, you obtain judgment. Until you obtain

judgment you do not know that you have lost your

money. All he has lost was the possible right to

obtain a judgment but he had not lost his judgment or

his money. And, in that respect, we would submit,

Your Honour, that it would go to the time of judgment

as when he suffered his loss of money.

There are, we would submit, four alternatives

based upon HAWKINS V CLAYTON, Your Honours.	Do you
have copies?

MASON CJ:  No .

:MR. MORRIS:  Based upon HAWKINS V CLAYTON, Your Honours, we would

submit there are four alternatives which - or three

alternatives in CLAYTON at which"·the time of limitation

would run. First of all, Your Honours, we would submit,

it is when the plaintiff discovered that the adjournment

had been obtained or consented to withou~ his

instructions and, indeed, contrary to his instructions

and to that point, Your Honours, we would go to page 260G

of HAWKINS V CLAYTON, the judgment of His Honour

Mr Justice Deane:

A cause of action in negligence is

complete when the damage caused by the

breach of duty is sustained. It is at

that time that, in the ordinary case, the

cause of action "first accrues" for the purposes of a provision such ass 14(1)

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of the LIMITATION ACT. It was submitted,

on behalf of the plaintiff, that this

Court should qualify that settled position

by a general proposition that, at least

in the case of a claim in negligence for

damages for economic loss, time does not

conunence to run for the purposes of a

provision such ass 14(1) until the stage

is reached when the plaintiff discovers,

or could on reasonable inquiry have discovered,

that the damage has been sustained.

After citing KAMLOOPS and several other cases, it goes

on to say:

I do not think that those cases, upon

proper analysis, support the broad

proposition for which the plaintiff contends.

Such support is, however, to be found in the judgment of the Supreme Court of Canada in

CENTRAL TRUST CO V RAFUSE.

His Honour further discusses KAMLOOPS and at the bottom

of that column of page 261G, Your Honours, said:

Insofar·as-RAFUSE establishes a different

general rule for Canada in relation to the

op.era·tion of Statues of Limitation, I am

not persuaded that it should be followed in

this country. That is not, of course, to

say that the general rule may not be subject

to qualification in some special circumstances

or that its application may not involve

unresolved difficulties in special categories

of case (eg cases where all that is involved
at the time of a tortious act is a risk of

future economic loss.

And we would say that this was an occas~on where

there was a risk of future economic loss. Further,

and almost opposite that on the next column, Your Honours:

there is something to be said for the view

that a distinct cause of action accrued each

time new damage was incurred by reason of the

continuing breach of duty.

And we would submit that in this case that there was a breach; a cause of action arose when the plaintiff

discovered that the adjournment had been granted

contrary to his instructions and without his consent.

Each time ther~ was new damage, we would submit,

Your Honours, that there was a continuing duty on the

solicitor to tell the client that he had consented

to the adjournment and this was not done. It was

not until October that the solicitor gave the plaintiff

an explanation which the plaintiff subsequently found

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to be incorrect and on that basis we would say
there was a continuing duty on the solicitor to advise

the client of what he had done and what had occurred

and the time runs from when the plaintiff discovered

that breach of duty. I would rely also upon those ~assages in page 261 that I have just referred to,

Your Honours.

There is also, Your Honours, at page 267, in the

judgment of Her Honour Justice Gaudron, just below C:

So, too if the interest infrin3ed is an

interest in recouping moneys advanced it

may be appropriate to fix the time of

accrual of the cause of action when

recoupment becomes impossible rather than

at the time when the antecedent right to

recoup should have come into existence, for

the actual loss is sustained only when

recoupment becomes impossible.

And we would say that the recoupment became impossible
upon the death of, in one case, the first defendant
and later on the departure from the country of the

second defendant, but recoupment would only become impossible after judgment had been obtained in the

substantive matter that was being litigated. We would

submit, Your Honours, that because of the uncertainty

of law in regards to economic loss and when the cause

of action arises in economic loss that this is a matter

of some importance and that it is a matter for the

Court to consider.

In surrnnary, Your Honours, the causes of action,

we would submit, that exist by reference back to

HAWKINS V CLAYTON would be that the continuing cause

of action until disclosure or it has been ascertained

by the plaintiff that the cause of action would be then

in October in which case the cause of action was

within time; secondly, Your Honours, it was when

discovered; thirdly, Your Honours, on the death of

the first defendant and the later departing of the

country and death of the second defendant being a
claim for monetary loss, it could not arise until the

monetary loss was in fact incurred. Thank you,

Your Honours.

MASON CJ:  The Court will take a short adjournment in order to

determine the course it will take in this matter.

AT 3.01 PM SHORT ADJOURNMENT

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UPON RESUMING AT 3.07 PM:

MASON CJ:  The Court need not trouble you, Mr Sheller.

MR SHELLER: If Your Honours please.

MASON CJ: This is an application for special leave to appeal

from the refusal by the Court of Appeal of leave to

appeal. The Court of Appeal refused to follow the

observation of Lord Justice Buckley in WIFFEN V

BAILEY AND ROMFORD URBAN COUNCIL, (1915) 1 KB 600,

where His Lordship said at page 607:

It is well established that the difference

between solicitor and client costs and

party and party costs is not legal damage.

The existence and limits of the so-called rule in

WIFFEN's case were not canvassed in argument in the

Court of Appeal comprehensively or in the judgment
of that court. The case is therefore not an appropriate·
vehicle for this Court to grant special leave to
appeal with a view to undertaking an examination of

the so-called rule in WIFFEN's case.

The application for special leave to appeal

is therefore refused.

MR SHELLER:	I would ask for costs, Your Honour.
MASON CJ:	You cannot oppose that, can you, Mr Morris?
MR MORRIS:	No, Your Honour.
MASON CJ:	The application is refused with costs.
AT 3.08 PM THE MATTER WAS ADJOURNED SINE DIE

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