Tobin v Dodd
[2004] WASCA 288
•3 DECEMBER 2004
TOBIN -v- DODD & ORS [2004] WASCA 288
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 288 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:85/2003 | 3 JUNE 2004 | |
| Coram: | MURRAY J EM HEENAN J LE MIERE J | 3/12/04 | |
| 33 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal granted if that be necessary Appeal allowed Leave granted to amend statement of claim as sought Refer action to a Registrar for case management | ||
| A | |||
| PDF Version |
| Parties: | GRAEME WILLIAM TOBIN BRUCE STEVENSON DODD ROBERT JAMES AINSLIE IAN MICHAEL LISHMAN BRAHMANANDA DHARMANANDA |
Catchwords: | Appeal Pleadings Appeal from decision to dismiss action for disclosing no reasonable cause of action Final or interlocutory decision Duty by solicitor to client Tort or contract Retainer of solicitors Duty to persons other than party who personally engages solicitors Standing to sue for damages Financial loss Distress and illness Whether damages essential to cause of action Sufficiency of facts alleged in statement of claim No need to plead law Litigant in person Action against partnership Some but not all members of firm joined as defendants Significance of partners joint liabilities Partnership Act s 16 |
Legislation: | Partnership Act (1895), s 16, s 28 Supreme Court Act (1935), s 60(1)(f) |
Case References: | AG v Pontypridd Water Works Co [1908] 1 Ch 388 Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317 Ashmore v Corporation of Lloyds [1992] 1 WLR 446 Australian Communications Exchange Ltd v Deputy Commissioner of Taxation [2003] HCA 53; (2003) 77 ALJR 1806 Baltic Shipping Co v Dillon (1993) 176 CLR 344 Dai v Telstra Corporation Ltd (2000) 171 ALR 348 Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Dousi v Colgate Palmolive Pty Ltd (1987) 9 NSWLR 374 Ex parte Bucknell (1936) 56 CLR 221 Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148 Fullarton v North Melbourne Electric Tramway & Lighting Co Ltd (1916) 21 CLR 181 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Harris v Beauchamp Bros [1893] 2 QB 534 Hill (t/as R F Hill & Associates) v Van Erp (1997) 188 CLR 159 Hunt v Allied Bakeries Ltd [1956] 1 WLR 1326 Jacobson & Ors v Ross & Anor [1995] 1 VR 337 Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936 Kendall v Hamilton (1879) 4 App Cas 504 Lever Brothers Ltd v Bell [1931] 1 KB 557 Little v The State of Victoria (1998) 4 VR 596 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 MacPherson & Kelley v Kevin J Prunty & Associates [1983] VR 573 Minogue v Human Rights and Equal Opportunity Commission (1999) 166 ALR 129 Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383 Nocton v Lord Ashburton [1914] AC 932 Norbury, Natzia & Co Ltd v Griffiths [1918] 2 KB 369 Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 13 ACSR 117; 121 ALR 405 Pegrum v Fatharly (1996) 14 WAR 92 Performing Right Society Ltd v London Theatre of Varieties [1924] AC 1 Phillip Morris Inc v Adam Peter Brown Male Fashions Pty Ltd (1981) 148 CLR 457 Re Calder; ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343 Re Dawson; Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWLR 211 Re Full Board of the Guardianship and Administration Board (2003) 27 WAR 475 Robinson v Geisel [1894] 2 QB 685 Selangor United Rubber Estates Ltd v Cradock [1965] Ch 896 Tame v New South Wales (2002) 211 CLR 317 Tampion v Anderson [1973] VR 829; (1973) 48 ALJR 11 Weatherall v Satellite Receiving Systems (Australia) [1999] FCA 741 Wentworth v Rogers (No 5) (1985) 6 NSWLR 534 Wickstead v Browne (1992) 30 NSWLR 1 Williams v Milotin (1957) 97 CLR 465 Bishopsgate Insurance (Australia) Ltd (in liq) v Deloitte Haskins & Sells, unreported; FCt SCt of Vic; No 4901 of 1989; 9 September 1994 Bride v Anglo Australian Food [2000] WASCA 124 Dart v Norwich Union Life Australia Ltd [2002] FCA 168 Raybos Australia Pty Ltd v Scitec Corporation Pty Ltd, unreported; Court of Appeal NSW; No CA 146 of 1986 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : TOBIN -v- DODD & ORS [2004] WASCA 288 CORAM : MURRAY J
- EM HEENAN J
LE MIERE J
- Appellant
AND
BRUCE STEVENSON DODD
First Respondent
ROBERT JAMES AINSLIE
Second Respondent
IAN MICHAEL LISHMAN
Third Respondent
BRAHMANANDA DHARMANANDA
Fourth Respondent
(Page 2)
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER SANDERSON
Citation : DODD & ORS -v- TOBIN
File No : CIV 2592 of 2001
Catchwords:
Appeal - Pleadings - Appeal from decision to dismiss action for disclosing no reasonable cause of action - Final or interlocutory decision - Duty by solicitor to client - Tort or contract - Retainer of solicitors - Duty to persons other than party who personally engages solicitors - Standing to sue for damages - Financial loss - Distress and illness - Whether damages essential to cause of action - Sufficiency of facts alleged in statement of claim - No need to plead law - Litigant in person - Action against partnership - Some but not all members of firm joined as defendants - Significance of partners joint liabilities - Partnership Act s 16
Legislation:
Partnership Act (1895), s 16, s 28
Supreme Court Act (1935), s 60(1)(f)
Result:
Leave to appeal granted if that be necessary
Appeal allowed
Leave granted to amend statement of claim as sought
Refer action to a Registrar for case management
Category: A
(Page 3)
Representation:
Counsel:
Appellant : In person
First Respondent : Mr E M Corboy SC & Mr A T Macknay
Second Respondent : Mr E M Corboy SC & Mr A T Macknay
Third Respondent : Mr E M Corboy SC & Mr A T Macknay
Fourth Respondent : Mr E M Corboy SC & Mr A T Macknay
Solicitors:
Appellant : In person
First Respondent : Deacons
Second Respondent : Deacons
Third Respondent : Deacons
Fourth Respondent : Deacons
Case(s) referred to in judgment(s):
AG v Pontypridd Water Works Co [1908] 1 Ch 388
Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317
Ashmore v Corporation of Lloyds [1992] 1 WLR 446
Australian Communications Exchange Ltd v Deputy Commissioner of Taxation [2003] HCA 53; (2003) 77 ALJR 1806
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Dai v Telstra Corporation Ltd (2000) 171 ALR 348
Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Dousi v Colgate Palmolive Pty Ltd (1987) 9 NSWLR 374
Ex parte Bucknell (1936) 56 CLR 221
Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148
Fullarton v North Melbourne Electric Tramway & Lighting Co Ltd (1916) 21 CLR 181
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Harris v Beauchamp Bros [1893] 2 QB 534
Hill (t/as R F Hill & Associates) v Van Erp (1997) 188 CLR 159
Hunt v Allied Bakeries Ltd [1956] 1 WLR 1326
Jacobson & Ors v Ross & Anor [1995] 1 VR 337
Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564
Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936
(Page 4)
Kendall v Hamilton (1879) 4 App Cas 504
Lever Brothers Ltd v Bell [1931] 1 KB 557
Little v The State of Victoria (1998) 4 VR 596
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286
MacPherson & Kelley v Kevin J Prunty & Associates [1983] VR 573
Minogue v Human Rights and Equal Opportunity Commission (1999) 166 ALR 129
Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383
Nocton v Lord Ashburton [1914] AC 932
Norbury, Natzia & Co Ltd v Griffiths [1918] 2 KB 369
Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 13 ACSR 117; 121 ALR 405
Pegrum v Fatharly (1996) 14 WAR 92
Performing Right Society Ltd v London Theatre of Varieties [1924] AC 1
Phillip Morris Inc v Adam Peter Brown Male Fashions Pty Ltd (1981) 148 CLR 457
Re Calder; ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343
Re Dawson; Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWLR 211
Re Full Board of the Guardianship and Administration Board (2003) 27 WAR 475
Robinson v Geisel [1894] 2 QB 685
Selangor United Rubber Estates Ltd v Cradock [1965] Ch 896
Tame v New South Wales (2002) 211 CLR 317
Tampion v Anderson [1973] VR 829; (1973) 48 ALJR 11
Weatherall v Satellite Receiving Systems (Australia) [1999] FCA 741
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Wickstead v Browne (1992) 30 NSWLR 1
Williams v Milotin (1957) 97 CLR 465
Case(s) also cited:
Bishopsgate Insurance (Australia) Ltd (in liq) v Deloitte Haskins & Sells, unreported; FCt SCt of Vic; No 4901 of 1989; 9 September 1994
Bride v Anglo Australian Food [2000] WASCA 124
Dart v Norwich Union Life Australia Ltd [2002] FCA 168
Raybos Australia Pty Ltd v Scitec Corporation Pty Ltd, unreported; Court of Appeal NSW; No CA 146 of 1986
(Page 5)
1 MURRAY J: In respect of this matter, I have had the considerable advantage of reading in draft the judgment of Heenan J, with which I am in substantial agreement.
2 The appeal was instituted as of right, a process supported by the decision of this Court in Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148. As Heenan J observes, there was argument presented at the hearing of the appeal to support the proposition that the appeal was incompetent because, in the circumstances, the decision to dismiss the appellant's claim was an interlocutory decision in respect of which no application for leave to appeal had been made. In the end the point was not taken and so it remains the case, in my opinion, that although on a future occasion it may be necessary to examine the correctness of the decision in Florida Investments, this is not that occasion. I think it unnecessary to grant leave to appeal and I would simply allow the appeal.
3 The analysis undertaken by Heenan J of the proposed statement of claim shows, in my opinion, that it sufficiently reveals pleaded causes of action upon which the appellant proposes to rely. It may be that some further amendment would be required or desirable and there may be other interlocutory processes which will be required. No doubt in that regard it will be necessary to ensure that the Court does not, in an effort to assist this appellant, overstep the bounds and compromise its impartiality, but where a litigant is unrepresented that is a common problem with which the courts wrestle daily.
4 I would be content to make the orders consequential upon the allowing of the appeal which are proposed by Heenan J, rather than have this Court embark upon the task of striking out particular paragraphs of the proposed statement of claim. I would reserve liberty to apply to re-amend the statement of claim generally and, of course, further applications with respect to the sufficiency of the pleading on either side may always be made.
5 EM HEENAN J: On 13 January 2001 the appellant issued the writ in this action, with an indorsed statement of claim, seeking damages against the respondents by claiming for monetary and other relief for alleged breaches of duties said to be owed to him by the respondents when acting as solicitors for himself and his daughter in relation to proposed litigious proceedings. As will emerge more fully later there has been much controversy over whether or not the respondents ever acted as solicitors for the plaintiff, were ever retained by him or ever owed him any duty.
(Page 6)
- Indeed, the respondents have constantly objected that the appellant only alleges that he retained their firm as a disclosed agent for his daughter and, therefore, so it is submitted, had no personal relationship with the defendants' firm giving rise to any duty to him. It will be necessary to scrutinise those submissions later.
6 Despite the initiation of this action more than three and a half years ago, the defendants have never put in a defence but, rather, they issued a chamber summons on 21 January 2001 applying to strike out the statement of claim. This has given rise to an episode of protracted interlocutory controversy which has become depressingly familiar in recent years but, nevertheless, that is no reason to countenance a process which can result in such great delay and obstruction to the primary procedural objective of bringing the parties and the court promptly and effectively to a point where the real issues of fact and law, if any, arising between the parties can be identified and submitted to the court for adjudication. That it is the responsibility of all to ensure that this point is achieved as soon as practicable has been plainly stated on many occasions - Jacobson & Ors v Ross & Anor [1995] 1 VR 337 per Brooking J at 344 - 355 and Ashmore v Corporation of Lloyds [1992] 1 WLR 446 per Lord Roskill at 448 - and the principle is enshrined in a rule of court - O 1 r 4A and r 4B. This is a case where attempts at procedural manoeuvring have, notwithstanding these priorities, delayed rather than assisted the resolution of this litigation.
7 On 29 April 2002, by order of Acting Master Chapman, the original statement of claim filed by the plaintiff was struck out but the plaintiff was allowed an opportunity to replead. He filed a minute of amended statement of claim dated 13 August 2002 and, on 4 November 2002, applied on summons to join further parties. The matter came before Master Sanderson on 10 December 2002 when the learned Master made an order refusing leave to amend the statement of claim as proposed by the August 2002 minute. The plaintiff thereupon filed a second minute of proposed amended statement of claim on 6 February 2003. This came before Master Sanderson on 5 June 2003 together with the appellant's adjourned application to join further parties. However, only the plaintiff's application to substitute the proposed minute of statement of claim was dealt with on this occasion because, as the learned Master observed, "There's no good making an order joining certain parties if the action is, as the defendant wishes it to be, struck out" - t/s 70 AB 11D.
8 After hearing submissions from the appellant, the learned Master refused leave to amend to introduce the statement of claim as proposed by
(Page 7)
- the minute of 6 February 2003 and struck out the action entering judgment for the respondents with costs. In the transcript of the brief reasons given by the learned Master for this decision there are the following passages:
"I just don't think you've got a cause of action and, if you have, I've got no idea what your damages might be.
...
It just seems to me that the claim is incomprehensible.
The document doesn't comply with the rules of pleading.
In essence I am unable to understand just what the nature of the claim is and how it is founded; whether it's founded in tort or contract or a combination of both. Furthermore, it seems to me that even if some claim was said to exist the damages which the plaintiff seeks are not damages that would be open to him.
There is nothing to suggest that the claim, such as it is, might be properly formulated."
(Page 8)
- Florida Investments (supra) but which was not referred to in the judgment - Hunt v Allied Bakeries Ltd [1956] 1 WLR 1326 per Lord Evershed MR at 1328.
10 It seems, therefore, that there may possibly be occasion for this Court to reconsider the decision in Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd (supra) in the light of the decision in Little's case and decisions to similar effect in Weatherall v Satellite Receiving Systems (Australia) [1999] FCA 741; Dai v Telstra Corporation Ltd (2000) 171 ALR 348 at 352 and Wickstead v Browne (1992) 30 NSWLR 1 at 11. However, if this Court is to reconsider, and possibly depart from, one of its earlier decisions especially one which has been acted upon consistently for some years, it is necessary to establish that the court is satisfied that the earlier decision is wrong or that there is some other compelling reason why the previous decision should no longer be followed - see Re Calder; ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343 per Steytler J at 354 and Re Full Board of the Guardianship and Administration Board (2003) 27 WAR 475 at 484 - 486. In recent years it has often been the practice for this Court to be constituted by a bench of five Judges if and when an application to reconsider one of its earlier decisions is to be made (Supreme Court Act 1935, s 60(1)(f)).
11 In this case no prior notice was given of any submission to reconsider the correctness of the decision in Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd (supra). The court is presently constituted by a bench of three Judges. Having regard to the circumstances of this case, and the fact that the appellant instituted his appeal, ostensibly as of right, in reliance upon that decision, and where the decision from which he wishes to appeal is one which, even if interlocutory, would effectively put him out of court: Ex parte Bucknell (1936) 56 CLR 221 at 225; Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400; Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 at 584 and Dousi v Colgate Palmolive Pty Ltd (1987) 9 NSWLR 374 per Kirby P and Glass JA at 379, a strong case would exist for the appellant to be granted leave to appeal in this case if that were necessary.
12 When this was pointed out to counsel for the respondents, and an opportunity offered for him to take instructions, the court was informed that the respondents did not wish to advance any challenge to the competency of the appeal. As the question of whether or not a decision is final or interlocutory will go to the power of the court to entertain the appeal I consider that the appropriate course to follow in this case, where it is unnecessary and impractical to embark on the question of whether or
(Page 9)
- not the decision in Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd (supra) should be reconsidered, is to order that the respondent may have leave to appeal, if that be necessary, and proceed directly to the issues raised. The authorities cited by the respondent indicate that there may well be an occasion in a suitable case in the future for the court to reconsider the decision in Florida Investments Pty Ltd but it is quite unnecessary to pursue that subject further on the present occasion.
13 Many of the difficulties presented at the hearing of the application before the learned Master, and in this litigation generally, stem from the lack of knowledge and experience of the appellant who, as a layman, is conducting this litigation on his own without the benefit of legal advice or assistance. He has openly disclosed to the court previously, and at the hearing of this appeal, that he is unable to afford legal assistance and is trying his best to comply with the rules of procedure relating to civil actions. This has resulted in counsel for the respondents submitting to this Court that the fact that the appellant is an unrepresented litigant is a misfortune and not a privilege. While there may be some authority for that proposition I prefer to view the situation on the footing that the appellant is an individual who is exercising his personal rights to resort to the jurisdiction of this Court and is entitled to all, but no more than, the rights of any other litigant who wishes to have a grievance determined according to law.
14 The extent to which a court should act to ensure a fair trial when there is an unrepresented litigant was examined by the Full Court of the Federal Court of Australia in Minogue v Human Rights and Equal Opportunity Commission (1999) 166 ALR 129. In my respectful view the situations which can arise in those circumstances were very fully addressed by the decision of Sackville, North and Kenny JJ in that case at [26] - [30]. As it is possible that this action may proceed with the appellant unrepresented it is appropriate to set out these passages in full. Their Honours said:
"[26] Unrepresented litigants present difficult issues for courts and for individual judges. As the majority observed in Cachia v Hanes (1994) 179 CLR 403 at 415; 120 ALR 385 at 391:
'While the right of a litigant to appear in person is fundamental, it would be disregarding the obvious to fail to recognise that the presence of litigants in person in increasing numbers is creating a problem for the courts.'
(Page 10)
- Increasing attention is being devoted to the policy issues created by the increasing numbers of litigants in person. See, for example, Australian Law Reform Commission, The Unrepresented Party (Background Paper 4, December 1996).
[27] In Neil v Nott (1994) 68 ALJR 509; 121 ALR 148, the High Court considered whether the trial judge's exercise of discretion to refuse an extension of time for lodging an application for maintenance and support under the Administration and Probate Act 1958 (Vic) [had miscarried]. The court observed (at 510 and 150) that 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.'
In Abram v Bank of New Zealand (1996) ATPR 41-507 at 42,347, a Full Federal Court, faced with an unrepresented litigant's claim that the trial judge had not given him appropriate assistance to present his case, made this comment:
'What a judge must do to assist a litigant in person depends on the litigant, the nature of the case, and the litigant's intelligence and understanding of the case.'
We respectfully agree with this observation. Because the duty of the judge varies according to the factors identified by the Full Court in Abram, the duty to assist an unrepresented accused in criminal proceedings is likely to be more extensive than that imposed on a judge hearing civil proceedings in which one or more of the parties are not legally represented: cf MacPherson v R (1981) 147 CLR 512; 37 ALR 81; D A Ipp, 'Judicial Intervention in the Trial Process' (1995) 69 ALJ 365, at 369-70.
[28] The general principles governing the role of the judge in civil proceedings involving an unrepresented litigant have been stated in Rajski v Scitec Corp Pty Ltd (CA(NSW), 16 June 1986, unreported). Samuels J said this (at 14):
'In my view, the advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily
(Page 11)
- suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored. But the court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent ... At all events, the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement ... An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.'
- Mahoney JA made the following observation (at 27):
'Where a party appears in person, he will ordinarily be at a disadvantage. That does not mean that the court will give to the other party less than he is entitled to. Nor will it confer upon the party in person advantages which, if he were represented, he would not have. But the court will, I think, be careful to examine what is put to it by a party in person to ensure that he has not, because of the lack of legal skill, failed to claim rights or to put forward arguments which otherwise he might have done.'
These comments have been referred to with approval in subsequent cases: see In the Marriage of Johnson (1997) 139 FLR 384 (Fam Ct/FC), at 406 (and cases cited there); Morton v Vouris (1996) 21 ACSR 497 at 513-14 per Sackville J. There is nothing in Neil v Nott inconsistent with what was said in Rajski v Scitec Corp.
[29] A trial judge often faces something of a dilemma. While he or she may be bound to provide some advice and assistance to an unrepresented litigant, the authorities make it clear that the judge should not intervene to such an extent that he or she cannot maintain a position of neutrality in the litigation: Burwood Municipal Council v Harvey (1995) 86 LGERA 389 (NSW CA), at 397 per Kirby P. However, the boundaries of legitimate intervention are flexible and will be influenced by the
(Page 12)
- need for intervention to ensure a fair and just trial: Panagopoulos v Southern Healthcare Network (SC(Vic), Smith J, 15 September 1997, unreported) at 6."
15 The present case shares some features in common with the examples addressed by their Honours in that the issue of whether or not the proposed pleading shows an arguable case for the appellant is a question of law to be decided by the court without resort to evidence; with the conventional restraints that a plaintiff is not to be improperly deprived of his opportunity for the trial of his case: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130; and in the case of litigants in person, with a view to ensure that, in a poorly expressed or unstructured statement of claim, there is no viable cause of action which, with appropriate amendment or permissible assistance from the court, could be put into proper form - Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536 and 543.
16 In these circumstances it is necessary to examine with some care the claim which the appellant wishes to litigate in this Court and to determine whether, notwithstanding some idiosyncratic features in the proposed pleading, it nevertheless alleges a series of facts which, if proved, would entitle the appellant to the remedy of damages or to other relief which the court may grant. In this respect it is essential to bear in mind that the appellant need only plead facts which, if established, would justify the court in granting relief and that he is not obliged to plead or assert the legal significance which he contends attaches to the alleged facts or any conclusions of law to be drawn from those facts.
17 Under the judicature or fact system of pleading, it is not necessary for the pleader to set out, or to limit himself to, the cause or causes of action which are asserted as the basis for relief claimed. Indeed, it is not necessary to specify any cause of action at all as it is sufficient that a pleading alleges the facts sought to be proved and the relief claimed. So it will not be fatal if the facts alleged, if proved, do not entitle the plaintiff to the particular relief claimed provided that the facts as proved do entitle a claimant to some relief within the jurisdiction of the court - Phillip Morris Inc v Adam Peter Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 472. There is nothing unusual about a trial court, or an appellate court, adopting a view of the facts, or of the law, different from the views for which the parties to the litigation respectively contended: Australian Communications Exchange Ltd v Deputy Commissioner of Taxation [2003] HCA 53; (2003) 77 ALJR 1806 per Gleeson CJ at 1808 [7] and per Kirby J at 815 [51].
(Page 13)
18 Once the facts have been established, or are ascertainable, it is for the court to apply the law to determine what, if any, relief the claimant is entitled to, or how, otherwise, the litigation should be determined. If the pleading asserts facts which support any cause of action that will be sufficient for the court to give effect to the appropriate legal or equitable remedy - Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936 at 941; Lever Brothers Ltd v Bell [1931] 1 KB 557 at 582 and Selangor United Rubber Estates Ltd v Cradock [1965] Ch 896. These decisions illustrate the principle that if material facts are alleged in a pleading it is not necessary to plead the legal result or the existence of any particular liability or duty which arises from the facts explicitly alleged - see also Williams v Milotin (1957) 97 CLR 465 at 474 and Fullarton v North Melbourne Electric Tramway & Lighting Co Ltd (1916) 21 CLR 181 at 190.
The proposed statement of claim
19 The appellant has a daughter, Donna Michelle Tobin, who was formerly engaged in a business with a Mr Wayne Harris involving a franchised distribution of wedding gowns in Australia on behalf of a firm in the United States of America. A dispute arose between the appellant's daughter and her business partner, Mr Harris, which resulted, so the appellant contends, in Mr Harris wrongfully obtaining the entire franchise or its benefit in breach of obligations which he is alleged to have owed to Donna Tobin. Miss Donna Tobin desired to obtain legal relief against Mr Harris as a result of this alleged wrongdoing and her father, the appellant, desired to assist her because he wished to go into business with his daughter to develop the franchise in Western Australia, if and when it could be recovered by his daughter. To do so he had incorporated a proprietary limited company for the purpose.
20 In these circumstances the appellant alleges that he engaged the respondents' firm of solicitors in Perth to bring an action in Western Australia against Mr Harris seeking relief for his alleged breach of duty in taking the exclusive benefit of the franchise. An action was duly commenced in Western Australia (CIV 1087 of 1996) against Mr Harris and others by the respondents' firm of solicitors claiming such relief. While that action was still pending the appellant and his daughter came to the belief that it would be possible to recover Donna Tobin's business franchise by commencing litigation against a United States corporation in the State of California alleging breach of franchise obligations. The appellant contends that instructions were given to the respondents' firm to arrange to initiate legal proceedings in the United States for the recovery
(Page 14)
- of the franchise but that, despite representations that the respondents' firm had a presence in the United States and experience with the laws of the United States, they failed to commence, or to arrange to commence, legal proceedings in California before the expiration of an applicable limitation period. So the appellant desires to contend that this caused the loss of the opportunity to vindicate the claim for the recovery of the franchise or its benefit by litigation in California.
21 In the proposed statement of claim the appellant does not expressly allege that the proposed cause of action in the United States became time barred because of the respondents' negligence but he seeks to allege that the respondents had, "by running out of time", "cost the plaintiff and his daughter the opportunity to regain the franchise" and that this was due to lack of knowledge and experience about legal proceedings in California and delay from January 1996 on the engagement of the respondents' firm of solicitors until 1998 when advice was received from attorneys in the United States that the proposed action in California, although having merit, had run out of time. The proposed statement of claim also seeks to allege that the retainer of the respondents' firm of solicitors in 1996 or before included terms "of which were to recover Donna's business interests through litigation against Harris and ... in California for breach of franchise", in circumstances where the respondent's firm had represented that it had an office in New York and claimed that it had expertise in Australian/US legal matters.
22 Although, no doubt, the appellant's allegations might be more clearly and expressly set out it nevertheless seems to be clear beyond any doubt that the appellant is seeking to allege that he and his daughter retained the respondents' firm to bring legal proceedings in Western Australia for the recovery of the daughter's franchise and, in addition and because of their asserted legal presence in the United States and experience with United States' law, instructed the respondents to bring legal proceedings, or to arrange to bring legal proceedings, in California also seeking the recovery of the franchise.
23 In relation to the proposed proceedings in California the allegation which the appellant seeks to make is that because of inexperience of, and delay by, the respondents a meritorious cause of action in California became time barred. The clear implication is that the loss of the right to bring an action in California through the lapse of time was due to negligence or breach of duty by the respondents, notwithstanding that those words are not employed in the proposed pleading. I doubt whether they are essential having regard to the sense of the proposed pleading as a
(Page 15)
- whole, but, if they are, the addition of a phrase alleging that the respondents' conduct constituted negligence or other breach of duty, is the kind of amendment which should usually be permitted in order to allow a plaintiff to replead so as to describe adequately what may well constitute a good cause of action - Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 13 ACSR 117 at 127; 121 ALR 405 at 414 where Beaumont J said:
" ... under the modern system of pleading, the question is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, the question is whether it would be open to prove facts at the trial which would constitute a cause of action (see Mutual Life and Citizens Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631)."
• the original action was to be dealt with as quickly as possible;
• the respondents' firm failed to include the main and most substantial of Harris' companies as a defendant in the original action causing unnecessary delay;
• through a representative of the respondent continually giving misleading information about progress undue stress was caused to the plaintiff and to his daughter;
• the respondents' firm failed properly to represent the plaintiff at a strike out hearing;
• the respondents' firm did unnecessary work and wasted valuable time on a strike out application when it knew full well that the application had very little chance of success;
• unnecessary and repetitious work was done causing a waste of time;
(Page 16)
- • the respondents' representative failed to take instructions and subjected the plaintiff and his daughter to undue stress at a mediation conference, leading to additional and unnecessary costs;
- and that as a result of this conduct the appellant and his daughter withdrew the respondents' retainer. They proceeded with the original action against Harris and eventually obtained a settlement which they considered was not fair or just but which had to be accepted because "of the weak position [the respondents' conduct] had left us in". The appellant seeks to assert that the respondents' conduct caused him stress and depression, leading to two strokes and loss of the quality of life.
25 In a rather discursive series of allegations the appellant seeks to advance a claim for $2,500,000 damages "for loss of opportunity due to the defendants providing misleading information and their negligent, unconscionable and unprofessional handling of the original action against Harris and the running out of time to take action against [the American corporation]". This is later amplified by a claim for a similar amount for ill-health and loss of quality of life. In addition to claims for alleged negligence, unprofessional and unconscionable conduct the appellant adds an allegation that the respondents were in breach of fiduciary duty.
26 Drawing the threads of this proposed pleading together in order to identify the appellant's basic contentions it can be seen that the proposed claim is against a firm of solicitors seeking relief for alleged breach of their duty in relation to the conduct of a civil action in Western Australia and in failing to act on instructions to bring a corresponding claim in the United States of America within time. The action which was commenced in Western Australia was commenced in the name of the appellant's daughter to enforce her personal claims said to arise out of a business franchise held by her and a former business partner, Mr Wayne Harris. The proposed proceedings in the United States were also to be brought on behalf of the appellant's daughter against Mr Harris and one or more United States corporations again associated with the enforcement of rights said to arise from the franchise held by the appellant's daughter and/or Harris.
27 In relation to the conduct of the civil claim in Western Australia the plaintiff desires to allege that the defendants' firm of solicitors mishandled the conduct of that litigation by providing misleading information about progress, incurring unnecessary costs and wasting time in relation to an interlocutory application, and putting undue pressure upon the appellant and his daughter in relation to negotiations for the settlement of the action.
(Page 17)
- This led, he contends, to the respondents being discharged as solicitors and, subsequently, an unsatisfactory settlement being accepted by the plaintiff's daughter due to the deterioration of her negotiating position caused by the respondents' conduct in the course of the litigation to that date.
28 The allegations made in relation to the proposed proceedings in the United States are, substantially, that the respondents misrepresented their experience and presence in the United States; their familiarity with the law of the United States; and that they failed to act on the instructions to commence, or to cause to commence, proceedings in California promptly with the result that a meritorious claim for relief in the United States became time barred. The appellant also desires to assert that in the process all this weakened the appellant's daughter's position in reaching an acceptable settlement of her pending claim in the Western Australian proceedings.
29 The proposed statement of claim seeks a large liquidated sum for damages which appears to constitute, in part, a percentage of the profits sought to be derived from the franchise, the loss of the opportunity to bring the proposed action in California, and (possibly) a loss occasioned by accepting the settlement for what is alleged to be an inferior result made necessary by the failure to conduct the litigation properly. Significantly, the liquidated claim for damages is also for ill-health and loss of quality of life resulting from stress due to the alleged pressure caused by the respondents and the manner in which the litigation was conducted.
30 Obviously, the proposed claim for damages is unconventional, sparse in particularisation and devoid of any mathematical calculation seeking to measure the quantum of the loss in any precise way from the effects of the alleged breaches of duty by the respondents. Nevertheless, it is a claim for damages in an action which raises issues of alleged breach of contract, misrepresentation, negligence and breach of fiduciary duty.
31 An action for breach of contract is sustainable without the need to allege or prove actual loss or damage and such an action, if succeeding, will entitle the plaintiff to an award of nominal damages: Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286. A statement of claim which shows an arguable case for nominal damages for breach of contract reveals a sufficient cause of action which cannot be struck out for failure to disclose a reasonable cause of action.
(Page 18)
32 This proposed statement of claim also advances allegations in negligence, misrepresentation and breach of fiduciary duty. An action in negligence, and a claim for misrepresentation of the kind here advanced requires actual damage to be alleged and proved for any cause of action to be established. In this case there is an allegation, admittedly not particularised, asserting that an inferior result was obtained by the appellant's daughter in the eventual settlement of the litigation in CIV 1087 of 1996, because of the deterioration in her negotiating position due to the alleged breaches of duty by the respondents' firm. Any such loss, even if adequately particularised, would seem to be a loss solely by the appellant's daughter and she is not a co-appellant in the present proceedings. Nevertheless, the appellant contends that he has suffered stress, depression and ill-health because of the respondents' firm's alleged breach of duty and, if proved, that would be loss or damage of a kind personal to him which would arguably support an action in negligence - Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317. Similarly, actual illness or physical discomfort caused by a breach of contract would be sufficient to justify an award of substantial, as opposed to nominal, damages if established - Baltic Shipping Co v Dillon (1993) 176 CLR 344 per Mason CJ at 363.
33 In situations where there is a claim for relief because of alleged breach of fiduciary duty and where an account of profits is not appropriate the remedy to be granted for loss or damage will usually be compensation designed to achieve a restitutio in integrum: Re Dawson; Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWLR 211 and Nocton v Lord Ashburton [1914] AC 932. It is difficult in the present circumstances to see quite how, if at all, the facts which the appellant seeks to allege would give rise to a claim for equitable compensation but in view of the assertion of facts giving rise to recognizable claims for damages for breach of contract and/or negligence the reference to such a third cause of action in the proposed statement of claim may simply be superfluous and, as such, a matter which could be struck out or deleted without detracting from the right of the appellant to pursue the other two recognizable causes of action.
34 Accordingly, despite the lack of legal knowledge and experience which the proposed pleading reveals, I consider that the appellant's minute of statement of claim does disclose two recognizable causes of action and arguable claims for damages against the respondents for breach of contract and/or negligence.
(Page 19)
35 More significantly, however, the respondents have submitted that any causes of action which might arguably exist are personal to the appellant's daughter and that he has no right or standing to sue the respondents on his own behalf as he was never more than his daughter's agent when retaining their firm. Associated with this submission is the respondents' argument that the only cause of action which the law will recognize in the circumstances of this case is one arising out of a contract between the appellant's daughter and the respondents' firm. Their submission is that there can be no scope to allege any independent duty to the appellant in tort because that could give rise to a conflict of interest between father and daughter which could not be accommodated by the obligation of the firm to Ms Donna Tobin arising from the contract between them.
36 The submission that the appellant was never more than agent for his daughter arises, so it was submitted for the respondents, from par 1 of the proposed statement of claim which provides:
"1. The plaintiff was and is at all material times the father of Donna Michelle Tobin (Donna); the plaintiff in the action CIV 1087 of 1996 (the original action) against her former business partner Mr Wayne Harris and his five companies, with the power of attorney to act in this matter and subsequent actions in relation to this matter. The plaintiff's Date of Birth is 15 January 1939 in Perth; the plaintiff retained Mallesons Stephen Jaques (MSJ), signed the 'Costs Agreement' and was at all material times the guarantor of the costs associated with the original action."
- In addition, the respondents submit that the appellant has consistently taken the position and advised the court in his pleadings, in the various documents that he has previously submitted to the Master, and in statements in the course of hearings before the Master, that he instructed the firm of Mallesons Stephen Jaques on behalf of his daughter through a power of attorney. However, on an application to strike out a pleading under RSC O 20 r 19 the sole focus for the examination of the adequacy of the pleading is the pleading itself and no evidence is admissible upon such a strike out application on these grounds - RSC O 20 r 19(2).
37 Turning, therefore, to the terms of the minute of proposed statement of claim it is far from evident that the appellant desires to allege only that he acted as agent for his daughter. Indeed, a contrary position emerges from the following passages in the proposed statement of claim which
(Page 20)
- allege that the appellant retained the respondents' firm of solicitors both for himself and for his daughter for them to provide legal advice and representation in relation to the conduct of his daughter's litigation but that he, as well as his daughter, was a client of the firm:
· within par 1:
the plaintiff retained Mallesons Stephen Jaques (MSJ), signed the "Costs Agreement" and was at all material times the guarantor of the costs associated with the original action;
· 7.3
In 1998 when MSJ advised the plaintiff and his daughter that they did not have the experience to take legal action against Lotus Orient Corporation (Lotus California (USA)) as part of the original contract MSJ had with the plaintiff ...
· 8.1
Express instructions given to ... of MSJ ... was acknowledged and accepted by MSJ in a letter to the plaintiff and his daughter in January 1996.
· 8.3
MSJ through ... continually gave misleading information on the progress of the original action ... causing undue stress to the plaintiff and his daughter.
- · 8.7(d)
Failed to take instructions and subjected the plaintiff and his daughter to undue stress at the mediation conference ...
(a) told the plaintiff and his daughter at the mediation conference that she had to make an offer when apparently she did not have to do so;
(b) failed to provide the plaintiff with detailed costs to date;
(Page 21)
- · 10
The plaintiff claims that Mallesons Stephen Jaques ... had a duty of care with the plaintiff because he has signed a contract (Cost Agreement) on 12 February 1996 with MSJ in which it was agreed and had been agreed previously in a letter from MSJ dated 8 January 1996 that legal action was to start against Harris as soon as possible.
· 13
The plaintiff claims that MSJ had a "fiduciary duty to both the plaintiff and his daughter and were in breach of that duty ... ".
39 Such an arrangement is by no means uncommon: a parent may retain a firm of solicitors to act for his or her child, either generally or in relation to particular pending or contemplated proceedings for the advancement or protection of an interest of the child. A husband may engage solicitors to act for his wife, or vice versa, in relation to proceedings or in a transaction in which only the spouse has a legal interest. Yet the engagement by the parent, or by the other spouse of the solicitors involves a contract between that person and the solicitors notwithstanding that the benefit of the contract may be for a third person or, in the instance which is alleged in the present case where father and daughter both engaged a firm of solicitors to act in relation to proceedings for the enforcement or protection of a right personal to the daughter. In
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- such circumstances the parent, in this case, the father, has a direct contractual interest in ensuring that the contract is performed for the benefit of his daughter and assumes liabilities for the payment or guarantee of costs and disbursements to ensure that that is done.
40 Counsel for the respondent submitted that no such conclusion was warranted by the content of the proposed statement of claim and that, in any event, the identification of the person who was to pay for the solicitor's fees and disbursements was not indicative of who the client was or to whom the solicitors may owe professional duties, citing in this regard the following passage from the judgment of Anderson J in Pegrum v Fatharly (1996) 14 WAR 92 at 105:
"The fact that it was W who was to pay the respondent's fees for the work is quite immaterial, in my opinion. Nor can it make any difference that as between the respondent and W it was agreed the respondent's charges would be absorbed by the respondent in the monthly retainer, and that Mr Pegrum knew they had come to that understanding. The arrangement between the parties as to who should pay for the work is seldom material to the question for whom the work is done and to whom the professional duties are owed: see Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384 at 386. It is not unusual for a person to engage a solicitor on the basis his fees are to be paid by someone else: see Morgan v Blyth [1891] 1 Ch 337 at 359."
- This much can be readily acknowledged, but the result in Pegrum v Fatharly (supra) was that a professional engagement with the solicitors was found to have arisen by implication and was presumed from conduct of the parties which showed that the relationship of solicitor and client had, in fact, been established between them. In Pegrum v Fatharly (supra) Ipp J said at 95:
"A contractual relationship of solicitor and client will therefore be presumed if it is proved that the relationship of solicitor and client existed de facto between a solicitor and another person. Upon proof of that kind it would not be necessary to prove when, where, by whom or in what particular words the agreement of retainer was made."
and Anderson J also said (at 102):
(Page 23)
- "When both parties to a transaction consult the same solicitor and together give him the information needed to prepare the documents in which their respective rights and obligations are to be set out and the solicitor accepts responsibility to prepare the documents without any indication that he cannot fully discharge his professional duties to them both there is a strong bias towards finding that the solicitor tacitly agrees to act for both parties and to undertake the usual professional responsibilities to them both: see Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384 especially at 396."
41 In the present case the appellant's allegation in the proposed statement of claim is that he retained the respondents' firm, signed the Costs Agreement and was the guarantor. He further alleges (by par 2) that in August 1999 he and his daughter terminated the retainer, again indicating that his case is that the respondents' firm was acting for both himself and his daughter. This is what the pleading seeks to assert. It is not intrinsically improbable and it is not, in my view, inconsistent with the concurrent allegation that, as attorney, he acted as agent for his daughter to authorise the respondents' firm to commence legal proceedings on her behalf.
42 Furthermore, the appellant himself was interested in his daughter securing the return or the replacement of the franchise because, as already noted, he desired to go into business with his daughter through the company which they had both formed to operate the franchise in this State. This put him in a position where he stood to benefit from a successful outcome of the proposed litigation and where he therefore had a commercial interest to advance by engaging the solicitors to secure a result which would permit this to occur. It places him in a position of proximity which, independently of contract, would in my view give rise to a duty of care by the solicitors in tort. The judgment of Lush J, with whom Beech J agreed (Murphy J dissenting) in MacPherson & Kelley v Kevin J Prunty & Associates [1983] VR 573 that a retained solicitor is concurrently liable to his client both in contract and in tort if he discharges his duties negligently, received its vindication by the High Court in Hill (t/as R F Hill & Associates) v Van Erp (1997) 188 CLR 159. In the latter case Brennan CJ said (at 166):
"Although a solicitor's contractual duty is owed solely to the client, the existence of that duty does not necessarily negate a duty of care owed to a third party in tort. To the contrary, the undertaking of a specialist task pursuant to a contract between
(Page 24)
- A and B may be the occasion that gives rise to a duty of care owed to C who may be damaged if the task is carelessly performed [footnotes omitted]. Thus in Pippin v Sheppard (1822) 11 Price 400; 147 ER 512, in an action by a man and his wife against a surgeon for negligent treatment of the wife, the declaration that the surgeon had been employed for reward without alleging who had retained him was held to be sufficient. Whether it was the husband or the wife that employed the surgeon, the damage had been suffered by the wife and she had the cause of action."
- At 172 - 173 Dawson J said:
"Clearly Mrs Hill owed a duty of care to the testatrix, Mrs Currey, and it was a duty both in contract and tort. The view that the relationship between the solicitor and client is governed exclusively by the contract of retainer and leaves no room for liability in tort on the part of the solicitor was never based upon a firm foundation and is no longer accepted: see Hawkins v Clayton (1988) 164 CLR 539; Midland Bank v Hett, Stubbs & Kempt [1979] Ch 384; Ross v Caunters [1980] Ch 297; Henderson v Merrett Syndicates Ltd [1995] 2 AC 145; White v Jones [1995] 2 AC 207; cfRobertson v Flemming (1861) 4 Macq 167; Groom v Crocker [1939] 1 KB 194."
and Gummow J said at 234:
"More recently, in Al-Kandari v J R Brown & Co [1988] QB 665 at 675, Bingham LJ said:
'A solicitor owes a duty of care to his client. If the client intends to confer a benefit on a third party, the solicitor may owe a duty to the third party to take reasonable care to see that effect is given to the client's intentions.'
This is an illustration of the proposition espoused by Mason CJ, Deane and Gaudron JJ in Bryan v Maloney [1995] 182 CLR 609 at 621 that, in some circumstances, the existence of a contract will provide the occasion for, and constitute a factor favouring the existence of, a liability in negligence between one or other of the parties to the contract and a third party."
(Page 25)
- respondents' firm to him in tort because the proper performance of the solicitor's contractual duty to Donna Tobin was intended to confer, at least in part, a benefit upon her father, the appellant, by making the franchise available for exploitation in Western Australia by both father and daughter through the company which had been incorporated for that purpose.
44 The respondents also advanced submissions to the effect that the law would not recognise the existence of a dual duty by solicitors to the appellant and to his daughter, whether in contract or in tort, because of the potential for conflict of interest to develop and because solicitors could only have one duty towards their client. In the present case, however, there was nothing to suggest that there was any actual or apprehended conflict of interest between the appellant and his daughter which would prevent the solicitors from acting for both of them in the retainer which was offered. Of course, it remains possible that the existence or apprehension of such a conflict may have been recognised at the time and so to have led to the solicitors declining to act for the appellant while accepting instructions to act for the daughter by her agent the appellant - unlikely though that may be. If so, that is a matter which can be pleaded by the respondents in defence to the claim by setting out facts which prevented, or were accepted as possibly preventing, them acting for the appellant.
45 At the moment, on the face of the allegation in the proposed statement of claim that the respondents' firm acted for both the appellant and his daughter, there is nothing intrinsically objectionable about that. Furthermore, the interests of the appellant and his daughter may well have been coincident and have been expected to remain so. In that case there could never have been any objection to the respondents' firm acting for both parties. Sometimes, however, even interests which were expected to be, and to remain, coincident may diverge and a situation could be reached in which it would have been necessary for the solicitors to arrange separate representation for each of their former clients. This is a possibility in every case where solicitors act for two or more people with apparently coincident interests, such as partners, beneficiaries of a trust or estate, co-owners of property, a group of shareholders in a corporation or multiple claimants in a class action. If the mere potentiality for some conflict of interest to develop between parties, whose interests had hitherto always been coincident, were sufficient to prevent solicitors acting for those presenting with apparently coincident interests, there could never be a situation in which a solicitor could act for more than one person, a theoretical result repudiated by common experience both in and
(Page 26)
- out of court. Consequently, I do not consider that the suggested potentiality for a possible future conflict of interest between the appellant and his daughter could possibly provide a reason to conclude that the appellant's minute of proposed statement of claim fails to disclose a cause of action against the solicitors in alleging breach of duties arising in contract and in tort owed by the solicitors both to him and to his daughter.
46 To conclude that the appellant has an arguable cause of action in his minute of proposed statement of claim does not mean, nor should it be regarded as meaning, that the appellant has a case which will succeed either at trial or in surviving other challenges which might possibly be brought against the claim which might allow the actual merits of the case to be evaluated on evidence of the facts presented to the court. The respondents may have a defence or several defences to the claims which the appellant is wishing to advance. Such defences may be matters of fact or they may involve points of law. Such facts or special defences as the respondents wish to rely upon must be specially pleaded so that the issues between the parties can be identified. That is the way litigation should proceed for only then will it be possible to see what issues of fact and law, if any, divide the parties and require a decision by the court for the determination of this claim. If that is done further interlocutory processes may lead to further refinements. The capacity for particulars to be sought, especially on matters of damages, should enable some of the shortcomings in the appellant's statement of claim to be overcome but those shortcomings are not fatal to the institution or prosecution of the action at this stage.
47 Another objection by the respondents to the proposed statement of claim, before the learned Master and again on the hearing of this appeal, was that the alleged contract of retainer was not with the individual respondents named as defendants in the action. The allegation in the proposed pleading was that the first-named respondent was at all material times the partner in the firm who represented the appellant's daughter; that the second respondent was at all material times the partner in charge of the Litigation Department at the Perth office, that the third respondent was at all material times the partner in charge of the Perth office until the year 2000 and that the fourth respondent was at all material times from the year 2000 onwards the partner in charge.
48 This submission needs to be taken in conjunction with the appellant's pending application to join further parties to the action which, as already noted, was also before the learned Master on 5 June 2003 but was not dealt with because of the decision to dismiss the action. That application
(Page 27)
- (AB 40 - 44) is a chamber summons dated 14 November 2002 seeking the joinder of seven named senior executives and partners as additional defendants to the action. It seems that no attempt has been made to sue the partners of the firm at the date of the alleged breach of duty in the firm name - see RSC O 71 r 1. Nevertheless, all four respondents named have appeared in the action and none has demanded the joinder of all partners within the jurisdiction who can be traced as additional defendants - Robinson v Geisel [1894] 2 QB 685 CA.
49 Where partners of a firm are sued in their individual names, rather than in the firm name, the obligation is on the plaintiff to ascertain who were the individual members of the partnership at the date of the accrual of the cause of action and to sue them all in their own names - Harris v Beauchamp Bros [1893] 2 QB 534 at 536. The practical difficulties which this entails, not least of which are difficulties of service, could be overcome if the partners are sued in the firm name. Other advantages of suing in the firm name include the ability to enforce any ensuing judgment against partnership property - see Partnership Act 1895, s 28. As the appellant has sued some, but not all, of the partners in the firm at the date of the alleged breach of duty he may have to face these procedural difficulties, and may even be forced to join all the partners before proceeding further with the action. This is because the liability of partners is joint - Partnership Act 1895, s 16 - and the consequent ability of those partners who have been joined in the action to apply to the court for an order staying the proceedings until all other persons so jointly liable with them are added as defendants - RSC O 18, r 4(3).
50 It would seem that the pending application by the appellant to join additional defendants may not entirely overcome this problem, at least if any of the present respondents, or those defendants who are to be joined, takes the point and applies for a stay of proceedings. However, no application has been made for a stay of proceedings by any of the existing respondents nor has there been any application to stay the action generally for want of necessary parties. Were such applications to be made at an early stage in the proceedings the provisions of RSC O 18 r 6(1) would not appear to be sufficient to dispense with the necessity for the joinder of all other partners of the firm at the date the cause of action arose, as distinct from providing an opportunity to direct and effectuate their joinder - Kendall v Hamilton (1879) 4 App Cas 504; AG v Pontypridd Water Works Co [1908] 1 Ch 388; Norbury, Natzia & Co Ltd v Griffiths [1918] 2 KB 369 CA and Performing Right Society Ltd v London Theatre of Varieties [1924] AC 1. All those difficulties might be avoided if the appellant were to apply successfully to sue the current respondents
(Page 28)
- and all other members of the firm at the date of the accrual of the alleged cause of action, in the firm name.
51 These procedural requirements, and the potential impediments which they may present to the prosecution of the action as it is presently constituted, do not detract from the existence of arguable causes of action presented by the proposed statement of claim. They do, however, constitute procedural obstacles which are capable of being overcome and, because they could be remedied, they do not justify any decision to dismiss the appellant's action. They are, self-evidently, the kind of problems which can and, should be, dealt with during the case flow management process of the court under RSC O 29 r 2 and this action, particularly having regard to its slow history to this point, should now be referred immediately to a Registrar for case flow management in accordance with that rule, so that issues of this kind need not further occupy the time and attention of the court for longer than is absolutely essential.
52 In the result, I consider that the following orders should be made. The court should grant the appellant leave to appeal from the decision of the Master of 5 June 2003 if leave be necessary. The appeal should be allowed, the order of the Master of 5 June 2003 striking out the appellant's action and giving judgment for the respondents should be set aside. In lieu therefore it should be ordered that the appellant have leave to file and serve the minute of proposed amended statement of claim filed in the court on 6 February 2003, such minute of proposed amended statement of claim to be served on the respondents within 21 days of the date of this order. However, in view of the pending application by the appellant to join additional parties and the consequent need to re-amend the proposed statement of claim, liberty should be granted to the appellant to apply for leave to re-amend generally after a review of this case to be conducted by a Registrar within 30 days of the date of this order pursuant to RSC O 29 r 2. At that review any orders that may be necessary in relation to the joinder or substitution of parties, or further amendments to the statement of claim which by then should have been made in accordance with this order, can and should be made. Also at that review attention should be given to whether or not the appellant should be permitted to maintain his claims for damages for alleged breach of fiduciary duty and/or his claims for damages for the breach of contract alleged to have caused financial loss to him in the settlement of Donna Tobin's action (CIV 1087 of 1996). Whether or not these parts of the proposed statement of claim are sustainable, or whether they should be struck out, are matters which should be dealt with at case management review or at a hearing of an
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- application before a Master giving due notice of the areas and grounds of challenge to specified portions of the pleading rather than be examined for the first time by this Court.
53 LE MIERE J: I have had the advantage of reading in draft the reasons for judgment of EM Heenan J. His Honour has set out the background and circumstances of this appeal and the proposed amended statement of claim.
54 The Master refused leave to amend the statement of claim in terms of the minute of 6 February 2003. For ease of reference I will refer to that minute as the statement of claim. The Master refused leave to amend in terms of the statement of claim on the grounds that the statement of claim did not comply with the rules of pleading. The Master entered judgment for the respondents on the grounds that he was not satisfied that there is any basis for the appellant’s claim against the respondents and there was no basis to conclude that the appellant's claim might be properly formulated.
Is there an arguable cause of action?
55 The respondents submit that the statement of claim discloses no arguable cause of action. The first point made by the respondents is that the statement of claim does not plead a contract between the appellant and the respondents; that is, there was no solicitor/client relationship between the appellant and the respondents. The respondents say that the only contract of retainer pleaded is a contract between the respondents and the appellant's daughter.
56 I agree with EM Heenan J that the statement of claim pleads that the appellant retained the law firm Mallesons Stephen Jaques (MSJ) to act for his daughter in relation to claims by her against her former business partner, Wayne Harris, and his companies. That is, there was a contract of retainer between the appellant and the firm. The pleaded terms of the retainer include that MSJ would act for the appellant's daughter in and in relation to commencing and conducting legal proceedings in Western Australia and California against Harris and his companies to recover loss and damage suffered by the appellant's daughter as a result of the conduct of Harris and his companies in relation to a franchise business dealing in bridal gowns.
57 The statement of claim pleads that the first respondent was the partner in the firm that represented the appellant's daughter in the original action. The appellant pleads facts that, if established, would arguably
(Page 30)
- constitute negligence on the part of the first respondent. The statement of claim pleads that the other respondents were partners in the firm. Every partner in a firm is liable for any wrongful act or omission of any partner acting in the ordinary course of business of the firm and for the contractual obligations of the firm.
58 The appellant pleads that he has suffered stress, depression and ill health because of the respondents' alleged breach of duty. A person is not liable, in negligence, for being a cause of distress, anxiety, annoyance or despondency without any resulting recognised psychiatric illness. A person may owe a duty to take reasonable care to avoid psychiatric injury to a plaintiff. In my view, the statement of claim discloses an arguable cause of action that the first respondent breached a duty to take reasonable care to avoid psychiatric injury to the appellant: see Tame v New South Wales (2002) 211 CLR 317; and the other respondents are liable for the wrongful acts or omissions.
59 Physical inconvenience has been accepted as a head of damage for breach of contract, but mere disappointment or upset is insufficient. The appellant pleads that MSJ represented that they had expertise in Australian and US legal matters. The appellant pleads that he gave express instructions to MSJ that the litigation was to be dealt with as quickly as possible. The appellant pleads that the respondents' delay in progressing the litigation and giving misleading information to the appellant caused him undue stress. The appellant further pleads that after he terminated MSJ's retainer, MSJ refused to hand over his files until he had paid $50,000. The appellant pleads that carrying on the litigation without the benefit of the files added to his workload and caused him stress. The appellant's claim is more than one by a disappointed litigant; it arises out of the respondents' alleged conduct towards the appellant in the course of carrying out their retainer. The appellant's claim in contract is sufficiently arguable to permit the claim to go forward to trial.
60 In my view, therefore, the proposed pleading discloses an arguable cause of action in negligence for breach of a duty to take reasonable care to avoid psychiatric injury to the appellant and an arguable cause of action in contract.
Not all partners joined
61 The respondents complain that not all the partners of MSJ have been joined as defendants.
(Page 31)
62 Every partner is jointly liable for the contractual obligations of the firm and jointly and severally liable for any wrongful act or omission of any partner acting in the ordinary course of business of the firm: see Partnership Act 1895 (WA), s 16, s 17 and s 19. The non-joinder of the other partners in the firm does not defeat a cause of action: see O 18 r 6(1).
Other claims
63 The statement of claim advances a number of other claims.
64 The appellant claims $2,500,000 damages for loss of opportunity due to the respondents providing misleading information and their negligent, unconscionable and unprofessional handling of the original action and the running out of time to take action in California against Lotus Orient Corporation (Lotus), one of Harris's companies.
65 The appellant was not a party to the original action or the proposed action in California. It is at least strongly arguable that the appellant did not suffer any loss of opportunity by reason of the negligent or otherwise wrongful handling of the original action by the respondents or by reason of the proposed action in California becoming statute barred and therefore the appellant is not entitled to bring a claim for loss of opportunity due to the respondents' negligent or otherwise wrongful handling of the original action or the proposed action in California.
66 The appellant also claims that the respondents were in breach of the fiduciary duty owed by the respondents to the appellant and his daughter in their conduct in handling the original action and "entering into an agreement with Harris which, if signed, would have put the appellant and his daughter's assets at risk and would have assisted Harris to carry out his alleged previous threat of bankruptcy and escaping the original action, leaving the appellant and his daughter to pay MSJ's legal costs in the event that Harris did go into bankruptcy." Again, it is at least strongly arguable that that pleading does not plead facts that, if proved, would establish a breach of fiduciary duty entitling the appellant to equitable compensation and hence the pleading does not disclose any reasonable cause of action.
Other objections
67 The respondents complain that many other parts of the proposed pleading are vague and non-specific. In my view, the respondents may, in due course, be entitled to particulars of some of the matters pleaded in the
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- proposed statement of claim. I would not refuse leave to amend for that reason.
68 The respondents object that par 6, par 7, par 8 and par 9, under the heading "Particulars" are not particulars of the plea contained in par 5. It is clear that the appellant does not intend par 6, par 7, par 8 and par 9 to be particulars of the plea in par 5. The appellant has not used the word "particulars" in the sense of particulars of a claim to be distinguished from the material facts giving rise to the claim. Nevertheless, the use of the word "particulars" in the proposed pleading is likely to give rise to confusion. It should not be included in the amended pleading.
Leave to amend
69 It is strongly arguable that parts of the pleading are defective. The statement of claim contains material that at least arguably discloses no reasonable cause of action. Material is not struck out merely because it is unnecessary. But unnecessary material may be struck out if it will prejudice, embarrass or delay the fair trial of the action. The pleading of the loss of opportunity due to the respondents' negligent or wrongful conduct of the original action and the proposed action in California arguably gives rise to false issues and is likely to embarrass and delay the trial by causing the litigation of false issues.
70 The court should approach applications for the peremptory termination of the litigation of litigants in person with a view to ensure that in a possibly ill-expressed and unstructured statement of claim there is no viable cause of action which, with appropriate amendment and a little assistance from the Court, could be put into proper form: Wentworth v Rogers (No 5) (1985) 6 NSWLR 534 at 536, 543. The Court will approach matters involving litigants in person with a degree of flexibility, bearing in mind that the rules of pleading are a means to an end, not an end in themselves.
71 The Master erred in terminating the action by ordering that judgment be entered for the respondents. Some parts of the proposed pleading are arguably untenable, but there are, in my view, elements of the claim in negligence and contract that are arguable. In all the circumstances, it would be wrong for this Court to preclude those claims being determined.
72 In my view, it is at least strongly arguable that some of the claims made by the plaintiff in his statement of claim disclose no reasonable cause of action and may prejudice, embarrass or delay the fair trial of the action. Those parts of the statement of claim were not specifically
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- considered in the decision appealed from. I agree with E M Heenan J that this court should not examine objections to specified portions of the pleading for the first time.
Conclusion
73 I would allow the appeal and make the orders proposed by E M Heenan J, rather than have this Court embark upon the task of striking out particular paragraphs of the proposed statement of claim. I would reserve liberty to apply to reamend the statement of claim generally and for the defendants to apply to strike out particular portions of the statement of claim.
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