Tomich v Kakulas and Kakulas
[2001] WADC 251
•31 OCTOBER 2001
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: TOMICH -v- KAKULAS & KAKULAS [2001] WADC 251
CORAM: KENNEDY DCJ
HEARD: 17-21 SEPTEMBER, 24 & 25 SEPTEMBER 2001
DELIVERED : 31 OCTOBER 2001
FILE NO/S: CIV 1867 of 1999
BETWEEN: CAROLINE MARGARET TOMICH
Plaintiff
AND
KAKULAS & KAKULAS
Defendant
Catchwords:
Solicitor/Client - Allegation of breach of contract and breach of fiduciary duty - Turns on own facts
Legislation:
Nil
Result:
Claim dismissed
Representation:
Counsel:
Plaintiff: In person
Defendant: Mr J R Criddle
Solicitors:
Plaintiff: Not applicable
Defendant: J R Criddle
Case(s) referred to in judgment(s):
Jongen v CSR Ltd & Anor (1992) A Tort Rep 81‑192
Case(s) also cited:
Arthur J S Hall & Co (a firm) v Simons [2000] 3 WLR 543
Bartlett v Barclay's Bank Trust Co Ltd (Nos 1 & 2) [1980] Ch 515
Boardman v Phipps [1967] 2 AC 46
Boughton & Anor v Knight & Anor [1861-1873] All ER 40
Bridgeman v Green (1757) Wilm 58
Butler v Knight [1867] LR 2 Exch 109
Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307
Commercial Bank of Australia Ltd v Amadio & Anor (1983) 151 CLR 447
Day v Mead [1987] 2 NZLR 443
Demetrios v Gikas Dry Cleaning Industries Pty Ltd & Ors (1991) 22 NSWLR 561
Donellan & Ors v Watson & Anor (1990) 21 NSWLR 335
Edward Wong Finance Co Ltd v Johnson Stokes & Master (a firm) [1984] AC 296
Farrington v Rowe McBride & Partners [1985] 1 NZLR 83
Feldman v A Practitioner (1977) 18 SASR 238
Fletcher & Son v Jubb, Booth & Helliwell [1920] 1 KB 275
Fray v Voules (1859) 120 ER 1125
Giannarelli & Ors v Wraith & Ors (1988) 165 CLR 543
Gibbons v Wright (1954) 91 CLR 423
Godefroy v Dalton (1830) 6 Bing 460
Gould & Anor v Vaggelas & Ors (1984) 157 CLR 215
Groom v Crocker [1939] 1 KB 194
Hart v O'Connor [1985] AC 1000
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1962] 1 QB 396
Imperial Loan Co v Stone [1982] 1 QB 599
Instant Nominees Pty Ltd v Redman (1987) WAR 218
Johnson & Ors v Perez (1988) 166 CLR 351
Ketteman v Hansel Properties Ltd [1987] AC 189
Kitchen v Royal Air Force Association [1958] 1 WLR 563
Laird v Mossenson (1990) A Tort Rep 81-058
Law Society of NSW v Harvey [1976] 2 NSWLR 154
Louth v Diprose (1992) 175 CLR 621
McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243
McNamara v Martin Mears & Co (1982) 127 Sol Jo 69
Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp (a firm) [1979] Ch 384
Molton v Camroux (1848) 2 Exch 487
Morley v Loughnan [1893] 1 CH 736
Myers v Elman [1940] AC 282
Nocton v Lord Ashburton [1914] AC 932
Purves v Landell (1845) 12 Ch & F 91
Re A Solicitor; Ex parte Incorporated Law Society (1895) 39 SolJo 219
Re Dawson (deceased), Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211
Re Newen; Carruthers v Newen [1903] 1 Ch 812
Re Van Laun; Ex p Chatterton [1907] 2 KB 23
Rees v Sinclair [1974] 1 NZLR 180
Ridehalgh v Horsefield [1994] 3 All ER 848
Rondel v Worsley [1969] 1 AC 191
Saif Ali v Sydney Mitchell & Co (a firm) [1980] AC 198
Smith v Linskills (a firm) [1996] 2 All ER 353
Somasundaram v M Julius Melchior & Co (a firm) [1989] 1 All ER 129
Thompson & Anor v Howley [1977] 1 NZLR 16
Todorovic & Anor v Waller (1981) 150 CLR 402
Udall v Capri Lighting Ltd (In Liq)[1987] 3 All ER 262
Vulic v Bilinsky & Ors [1983] 2 NSWLR 472
Williams v Bayley (1866) LR1HL 200
KENNEDY DCJ: The plaintiff who appears in person sues the defendants, her former solicitors, for breach of contract and breach of fiduciary duty in connection with a settlement on 10 April 1997 of her damages claim for injuries sustained in a motor vehicle accident.
The writ in this matter was issued on 12 May 1999 by a firm of solicitors and the plaintiff had legal representation until about 22 May 2001. While there are letters from the plaintiff and from her former solicitors advising that they no longer act for her, there does not appear to be a formal notice of ceasing to act on the file.
The defendants in this matter are partners in a legal firm and they are Mr Theo Kakulas and his nephew Mr Peter Kakulas.
Mr T Kakulas has been a legal practitioner since 1960, predominantly in the area of personal injury. He and his brother were in partnership until his brother was called to the bar and took silk. He then took his brother's son in as a partner. Mr P Kakulas was admitted to practice in 1986.
The plaintiff was injured on 19 November 1992 when the vehicle she was driving was struck from the rear by a vehicle driven by one Mansfield. Mansfield admitted liability but the quantum of damages the plaintiff should receive was in issue.
The plaintiff had been injured in three earlier motor vehicle accidents in the early 1980s. Then, she instructed Mr T Kakulas. In each of those accidents, liability was admitted. The quantum was settled in two of the three, but on the third, the offer was around $7,000 and was refused. The matter went to trial before Sadleir J and the plaintiff obtained judgment for about $18,000. In that matter, Mr T Kakulas briefed an independent barrister to appear on the plaintiff's behalf at trial.
On this occasion, the plaintiff instructed the defendant on 10 May 1994 and was initially seen by a clerk, Mrs Loula Kakulas. She eventually saw both Messrs Theo and Peter Kakulas, but her very considerable scorn and animosity is largely directed to Mr Peter Kakulas.
The plaintiff alleges that the defendant has destroyed a number of documents and had her sign blank authority sheets. Putting those allegations aside for the moment, it would have to be said that if the defendant is honest, its system is meticulous. It is simple but efficient and comprehensive and ideal for a negligence practice. It would ensure that the clients were cared for and the defendant protected.
Every step of the way, the defendant has had the plaintiff sign authorities. Those authorities set out, in very simple terms, what she has been advised at the particular appointment and what her instructions are for the future.
The first authority is dated 10 May 1994 and is as follows:
"I HEREBY CONFIRM THAT I HAVE BEEN INFORMED AS FOLLOWS:
(a)That party and party costs and disbursements are those items in the Supreme Court scale which the State Government Insurance Commission (hereafter called the S.G.I.C.) have to pay if I am successful in my claim.
(b)That solicitor and client costs and disbursements are those items of profit costs and disbursements which are not recoverable against the S.G.I.C. and are my responsibility and are to be paid by me.
(c)That you are not prepared to act for me on the basis that you receive party and party costs only.
(d)That you will at the conclusion of the claim, receive two sets of costs, firstly party and party costs and disbursements from the S.G.I.C. and secondly solicitor and client costs and disbursement from me. Such amount to be agreed just prior to the finalisation of my claim and that is the only basis on which you are prepared to act.
I HEREBY ACCEPT THE ABOVE AND AUTHORISE you to act as my solicitors to institute my claim against the S.G.I.C. for personal injuries as a result of the motor vehicle accident which occurred on the 19th day of November 1993 for damages and party and party costs and disbursements.
Dated the 10th day of May 1994.
C M TROMPP [now TOMICH]
Signed by client"
The other authorities which have been exhibited in the trial are as follows:
•Authority to issue the statement of claim
and proceed 31 January 1995
•Authority to set claim down for pre‑trial
conference and trial 7 June 1996
•Authority to obtain medical appointments
prior to pre‑trial conference 5 February 1997
•Memorandum as to costs of litigation 5 February 1997
•Authority to settle 5 February 1997
•Authority for observations, submissions
and schedules and that they had been
agreed to 11 February 1997
•Authority to reject offer 19 February 1997
•Authority to reject offer 10 March 1997
•Authority to invest 21 April 1997
•Acknowledgment of collection of file 21 April 1997
During the trial, the plaintiff referred to these as green pieces of paper and, for the sake of clarity, I confirm that the authorities are on green pieces of paper.
Telephone messages are written in the handwriting of the person who takes the telephone calls and are on pink paper.
At each interview, instructions are taken on yellow paper so that each time a person comes for another interview, it is possible by referring to the previous pieces of yellow paper to see what has happened since the last attendance and to go through that with the client.
Prior to the settlement of this matter, Mr T Kakulas saw the plaintiff on three occasions on 6 January and 16 June 1995 and 17 January 1996. During the attendance in January 1995, a proof of evidence was prepared and Mr T Kakulas had the assistance of his daughter who was then a law student, to spend extra time with the plaintiff to get the details of that proof. On 9 April 1996, Mr T Kakulas reviewed all of the medical evidence and the file generally and commenced to make an assessment of damages which was described in the inter office memo (Exhibit EE) as a tentative assessment. His assessment was that the best case was that she would received $201,500 the worst case that she would receive $100,000 and the probable case that she would receive $124,000. He thought that there was a risk in relation to the $124,000 if the matter went to trial and the Judge found that her decision to give up her work in a clerical/secretarial capacity was not due to the motor vehicle accident but was due to an extremely attractive redundancy package being offered by her then employers (which she took without taking advice from her solicitors) and by the fact that the following year she commenced studying law at Murdoch University, a degree course which she has now completed.
After completing his tentative assessment contained in that inter office memo, Mr T Kakulas referred the file back to Mr P Kakulas for further work to be done on it and also to a solicitor, Ms Jennifer Maher, then employed by the firm. Ms Maher was admitted to practice on 3 February 1996 and left the defendant on maternity leave on 3 February 1997.
The assessments were updated from time to time and reviewed on the same piece of paper and it can be seen that this was reviewed on 19 February 1997 by Mr T Kakulas.
On 5 February 1997, the plaintiff signed an authority to settle and certain amendments were made to it subsequently and these were initialled by the plaintiff. Those amendments are in handwriting and are typed in italics to distinguish them. That document is as follows:
"I HEREBY INSTRUCT YOU as follows:
1.I accept the medical evidence to date. I do not require any further medical treatment or reports and I want this matter finalised.
2.I am prepared to accept the sum of $100,000 as and by way of general damages inclusive of past and future economic loss and in order to obtain that sum I AUTHORISE you to commence your negotiations at
$150,000$220,000 inclusive of past and future economic loss. Target $120,000. Settled at $125,000. (CMT)3.PROVIDED THAT IN ADDITION THE S.G.I.C.:
a.pay 100% of accounts for reports and 100% of accounts for medical treatment as special damages.
b.Re‑imburse to you 100% of the following special damages paid by you on my behalf:-
Dr Stell - $280.00 (CMT)
c.Re‑imburse to me 100% of the following special damages being
(i)expenses which I have incurred:
Travelling allowance - $1,137.30
Chemist allowance - $100.00
Pillow - $59.00
Travel trolley - $95.00
Snorkel - $11.95
Bus tickets - $3.70
Taxis - $59.90
Swimming - $60.00
(CMT)
and (ii) Loss of earnings of $NIL.
N.B. Part of the General Damages.4.The S.G.I.C. to pay party and party costs and disbursements.
5.In addition to party and party costs and disbursements to be paid for by the S.G.I.C. I hereby agree that additional costs and disbursements inclusive of advances (if any) have been incurred and I agree to pay you the sum of (CMT)
$12,000$11,500 $14,000 as and by way of Solicitor and client costs and disbursements and I AUTHORISE you to make such DEDUCTION and account to me for the difference.6.I do not wish to receive any witness fees.
7.I do not wish to claim post Judgment interest from the S.G.I.C. unless the amount exceeds $100,000.
8.I understand that I may have to repay the sum of (CMT) $4,242.56 to Dept of Social Security."
It is dated 5 February 1997 and signed by the plaintiff. As can be seen, there are initials at the side where the words "settled at $125,000" are to be found. As will be seen a little later, those amendments were added after the second pre‑trial conference. Further, it is initialled at the point where Dr Stell's account is referred to and at the point where certain expenses are said to have been incurred by the plaintiff.
Mr T Kakulas said that he wrote the word "target" on that piece of paper and it was his practice to put in amounts tentatively in pencil with the target amount and then after the matter is discussed with the client and further reviewed, his figures can be written over in ink and that is what has happened here.
Not only is the authority to settle (Exhibit 4) dated 5 February 1997, but Exhibit QQ is a yellow sheet being an attendance by Mr P Kakulas on the plaintiff on the same day. At that time, there was a discussion about the pre‑trial conference and advice was given including that Mr Ian Marshall, an independent barrister, would be attending the pre‑trial conference with the plaintiff.
Exhibit W and Exhibit X are two letters from the defendants to the plaintiff of 5 and 9 December 1996 respectively which advise her of the date and time of the pre‑trial conference, that Mr Ian Marshall is her barrister, he will attend with her and she has an appointment to see him at 9.15 on 19 February 1996.
The plaintiff's evidence was that there were a number of the green forms that she signed and they were blank and she was also asked to put her initials at various spots on the paper. At the time, she did wonder why she was being asked to do that but she trusted Mr P Kakulas and assumed it was in order. Furthermore, there were a number of other green forms which she signed which were complete but which the defendant has refused to produce. The plaintiff says that she made it very clear from the outset and on almost every occasion when she saw Messrs P or T Kakulas that she had no intentions of settling her matter, that whatever happened, she wanted the matter to go to trial to be assessed by a Judge. She told Mr P Kakulas that she would be prepared to go to the High Court about the matter rather than accept a settlement and she had her matter assessed by a Judge on a previous occasion - this is what she wanted on this occasion and she would not settle for anything less. The defendant denies these allegations. Both partners specifically deny that she even said anything to them at all to indicate she would not settle and that the matter must go to trial.
Mr P Kakulas says that when he saw the plaintiff on 5 February, they discussed settlement and he took instructions from her to try to obtain $150,000 down to $100,000. At that stage, he had Exhibit 4 which had Mr Theo Kakulas' writing on it which had a figure of $150,000 for commencement of negotiations, $125,000 being the target and $100,000 being the bottom line.
Mr P Kakulas told the plaintiff that Mr Marshall would also give her advice and if his starting figure was higher than the starting figure provided by the defendants, then she should start with that because they could always come down but they could not go up.
Exhibit 15 is a copy of the plaintiff's schedule of heads of damage pursuant to Practice Direction 7.1 which was filed on 15 February 1997 and it sets out the heads of damage that the plaintiff seeks other than loss of amenities. The special damages had also been provided to the insurance company separately. The total claim was around $165,000 plus loss of amenities. It is to be noted that there was a claim for future lost income and a claim that the plaintiff was likely to take longer to complete her law degree than she otherwise would. In fact, the plaintiff completed her degree in the usual time. On 13 February 1997, after that document was prepared, Mr P Kakulas received a notice from the plaintiff's former employer, advising that the company contribution to her superannuation was 13 per cent of base pay which, of course, is much greater than the normal 6 per cent.
On 13 February 1997, he sent a memo to Mr Ian Marshall:
"Since the plaintiff's schedule of damage were filed, the plaintiff has provided us with proof that the CIG (employer's contribution to superannuation was 13% of the gross salary. Our calculation in the schedule of damages are based upon superannuation of 6%.
The schedules have not been amended to date as there may also be further amendments before the pre‑trial conference."
While he had not calculated them on the basis of the 13 per cent and only on the basis of the 6 per cent, at the same time he had not made the deductions required by Anderson J's decision in Jongen v CSR Ltd & Anor (1992) A Tort Rep 81‑192.
It is quite clear that what Mr P Kakulas was doing here was giving Mr Marshall another bargaining chip, however, when this memo was seen by the plaintiff, she wrote on the bottom of it:
"Why would you trust this person's advice (Peter Kakulas).
After three years, he still could not bother to get someone to calculate the loss - when he did, they/he calculated at 6% instead of the 13% the employer provided.
Makes an enormous difference."
Mr Ian Marshall was admitted to practice in November 1968 and is an independent barrister. On 19 February 1997, he was delivered a full brief in relation to this matter. He read the brief and prepared for the pre‑trial conference. He had an appointment to see the plaintiff at 9.15 am and spoke to her then.
They went to the pre‑trial conference together and negotiations took place. The defendant in that action was represented by Mr Momber, who had acted for the defendant in the plaintiff's previous accident claim.
Mr Marshall reported to the defendant (Exhibit JJ) in a comprehensive letter which provides, inter alia:
"... I advised Mr Momber that I thought the claim was worth $220,000 but was prepared to come down and, ultimately, in order that a settlement be achieved, I came down to the figure of $150,000. Mr Momber was adamant that $100,000 was as far as the State Government Insurance Commission was prepared to go.
This is a case where Mr Momber has had dealings with the plaintiff before and he has formed a view about her which is adverse. It may be that when Mr Mason takes over the case, then the situation might change. Mr Mason is counsel.
...
...
The attitude of the defence is that the carpel tunnel syndrome was not accident caused and the left and right wrist disabilities would have happened anyway and that the accident did not bring them on. I think Mr Smith would disagree with that in that she had no problem with her hands prior to the accident and it was only after the accident and the trauma to the upper limbs that the problem presented.
Mr Momber takes the view that there should be no allowance for economic loss as he has spoken to her previous employer and they say she was able to work most satisfactorily prior to her termination on redundancy payment and that they would have her back and they had no complaints at all about her work. The plaintiff said that she had great difficulties working and had to work sometimes until 10 at night, six days a week in order to complete the tasks assigned to her.
This is a case where an unsympathetic Judge would award the plaintiff less than $150,000 but a sympathetic Judge would be likely to award more than $150,000. I consider that the appropriate course of action is to try and settle the matter if possible on reasonable terms with Mr Mason."
In cross‑examination, Mr Marshall said that the $220,000 was put to Mr Momber but it was put for the purposes of negotiation but he denied having said to the plaintiff that at trial, she would get $225,000 nor did she ever say to him or to Deputy Registrar Hewitt in his presence that she was not going to settle out of court.
After the first pre‑trial conference, the plaintiff attended upon Mr P Kakulas for a further interview which is recorded in Exhibit RR. At that meeting, the plaintiff signed an authority (Exhibit N) to reject the offer that had been made at this first pre‑trial conference. Mr P Kakulas was expecting a formal offer under O 24A of the Rules of the Supreme Court. He advised the plaintiff that once that formal offer was made, if the matter went to trial and she did not get more than that formal offer, then she would have to pay the costs of the defendant from 28 days after the date of the formal offer.
At the interview on 19 February 1997, it was decided that they would wait until 7 April 1997 which was the day of the listing conference and it was hoped that further negotiations would take place on that day. On the instruction sheet, Exhibit RR, Mr P Kakulas has written a note to himself:
"Reject offer and wait to negotiate on 7/4/97. We will arrange witnesses to ensure trial date is okay."
It was agreed that the plaintiff would attend the listing conference. Listing conferences had then only recently been introduced and Mr P Kakulas thought there was a possibility that it might settle at that time since it was probable that Mr Mason who would be counsel at the trial would attend at the listing conference. The court has requested that the person who is to be counsel should attend at the listing conference.
It was also on that day that Mr P Kakulas undertook an independent assessment of the plaintiff's damages which he added to Exhibit EE.
The s 24A offer was received by the defendants on 21 February 1997 and he then made an appointment to see the plaintiff on 10 March 1997. Mr P Kakulas made the point that he always treats the s 24A offer differently from the offer made verbally at the pre‑trial conference because of the consequences that flow from not obtaining more than the s 24A offer at trial.
On 10 March 1997, the offer was once again discussed and the plaintiff had also seen the letter from Mr Ian Marshall about the first pre‑trial conference. Exhibit "O" is the plaintiff's authority to reject the s 24A offer signed on the day of that consultation. The plaintiff denies having seen Mr Marshall's letter and alleges he wrote it after the second pre‑trial conference in an endeavour to assist the defence. She is mistaken.
Mr P Kakulas said that at that consultation, the plaintiff was advised that there was a calculated risk in rejecting the offer once it was the subject of a s 24A notice but, given that there was now to be a listing conference at which it was hoped that there could be a settlement since the parties were only $50,000 apart and Mr Mason, rather than Mr Momber (who had an adverse view of the plaintiff), would appear at the listing conference and as counsel, it was hoped that the matter could be settled prior to trial.
On 4 April 1997, Mr P Kakulas attended upon Mr Marshall and he made an attendance note of that which is Exhibit VV. That attendance note is as follows:
"PBK and I Marshall
Ian will attend pre‑trial conference listing appointment.
I will give him updated brief.
I am concerned about client and if offer increased, she should settle. She will make a poor witness.
Ian will try to negotiate with Tim Mason."
That is the extent of Mr Kakulas' note but, as I have already recorded, the plaintiff uplifted her file a short time after this and has written comments on a number of these exhibits. One of the comments she has written at the bottom of this is a comment to the Legal Practice Board to whom she complained, and the comment is as follows:
"What an absolutely impertinent remark. Should have advised me to get another solicitor."
And also, this comment:
"This is an utter disgrace.
PK did not intend to have my case heard at court at all. I consider this absolutely unprofessional and to show his attitude would be to pressure me into finalising at my disadvantage."
Mr Marshall attended the listing conference as counsel. The principal registrar asked the parties who, by this time, were Mr Marshall and Mr Mason, how far apart they were, when they advised him that they were $50,000 apart he refused to give the matter a hearing date and referred it for a further pre‑trial conference. Mr Marshall has no recollection of any significant conversation after the listing conference.
The plaintiff was present as was Mrs Pelegia Christodulou (nee Kakulas), a young practitioner who was then working with her father and her cousin. The plaintiff called Mrs Christodulou who agreed that she attended the listing conference and sat next to the plaintiff. She did not recall any conversation between the principal registrar and counsel and the plaintiff did not say to her that the plaintiff would never settle. Had the plaintiff said that, she would have report it to someone at the office. The plaintiff says that she said to Mrs Christodulou that a further pre‑trial conference would be a waste of time because she would not settle out of court.
The second pre‑trial conference was listed for 10 April 1997. Mr P Kakulas received notice on 7 April and on that day, wrote to the plaintiff. The plaintiff said in her evidence that the letter did not arrive until the morning of 10 April.
The plaintiff's evidence is that on that night, she had had a poor night's sleep because she had a severe migraine headache. She had two Mersyndol and then vomited, so she took another Mersyndol. She had taken Inderal and Neurofen and at about 2.30 am, took Amitriptylene for nerve pain.
She heard the postman and went out to get the mail and noted that there was a letter from the defendant advising that the pre‑trial conference was on 10 April, but in her state, it did not register so she went back to bed. After a time, she realised that day was indeed the 10th and she got herself into a panic. She was unable to telephone the defendant because she did not have its telephone number and could not see to look it up due to her state. She got dressed and drove to the Innaloo Shopping Centre but decided that she was simply not well enough to drive a car so she left her vehicle there and got a taxi into the city.
She went to the defendant's offices and burst straight into Mr P Kakulas' office. She was bad tempered and irritable (she attributes that to the drugs) and told him that he had not given her notice and that she was not going to go to the pre‑trial conference, that she had a very bad migraine and had taken medication. Mr P Kakulas ordered her to attend the pre‑trial conference. Due to her state, it was as though she had no will of her own. As she was leaving his office, he held up in her face a piece of paper that had on it "$14,000‑$12,000" and said to her "That's what you owe me so far".
She went to the pre‑trial conference and met Mr Marshall there. She was in such a terrible state that she does not remember a lot about the pre‑trial conference. She had not even washed her face or combed her hair before attending.
She does remember going into chambers and speaking to the Principal Registrar and the next thing she remembered, she was outside and Mr Marshall put an offer in front of her and said to her that she had been offered $125,000. She then said to Mr Marshall "I have to go, I'm feeling ill". Her migraine was terrible and the drugs were affecting her ability to think. Mr Marshall replied "Sit down and read the offer". He was a changed man. She then said to him that she had read the offer and she had to go, he repeated that she must sit down and read it, he insisted that she sit down and read it and said that he would get Mr P Kakulas on the telephone, which he did. She had Mr Marshall talking to her at the pre‑trial conference end and Mr P Kakulas talking to her on the telephone saying "A bird in the hand is worth two in the bush". She was put under great pressure by both of them.
She could not leave until she signed, she can recall signing something without really being aware of what she signed and she did it to get away. She did not know she was signing away her day in court. Mr Marshall told her to go and see Mr P Kakulas and she can recall that she could not even find his office. Initially, she went into the building next door.
Eventually, she did see Mr P Kakulas and he said to her "Start spending your money, you'll feel better because you have signed the offer". She really could not understand what was going on but knew she had to get away and sleep off the effects of the migraine and the drugs.
Her state was so bad that she could not remember where she had parked her car and she sat in town for some hours before she remembered where it was.
The very next day, she telephoned the defendant's office. She asked to speak to Peter Kakulas and she said to the receptionist "I hope I didn't sign any compromise". She was told that Mr P Kakulas would not be in that day and she asked that he contact her immediately.
She was shown Exhibit 4 which is the authority to settle of 5 February 1997. She agreed it was her signature, though she disputed that her initials were there. She says that the amounts were not in there when she signed and she did not initial alterations. The only completed authority to settle she signed had only one amount in it, being $175,000. Mr P Kakulas told her that that was what her case was worth and even then, she repeated that she would not settle out of court. This authority has never been produced and, according to the defendant, it has not been produced because it does not exist. Further, she referred to Exhibit 1. That is a "lump sum compensation and damages settlement estimate of preclusion period and recoverable amount" form which must be completed and sent to the Social Security Department, signed by Mr P Kakulas on 5 February 1997 in which he says the "proposed gross settlement amount" was $175,000. Both defendants said there was no disadvantage to the plaintiff in overestimating the amount in this form and it was the usual practice because of concern that it would fall into the hands of the Insurance Commission, the fax numbers being so similar.
She further agreed that it is her signature on the consent to judgment signed before the Principal Registrar in pre‑trial conference on 10 April 1997 in which she consents to judgment in the sum of $126,806.85 (Exhibit 18).
Mr Marshall agreed that he attended with the plaintiff at that conference and said that her appearance was no different from the two previous occasions on which he had seen her, that is, at the first pre‑trial conference and the listing conference. There was nothing unusual about her manner or demeanour at all. She did not say she wanted to go to trial and he would not have signed off as the plaintiff's counsel if she had told him that she was ill or did not know what was happening. He did not recall her saying she had a migraine or had taken quantities of medication. When being cross‑examined, Mr Marshall was very kind to the plaintiff but he was also very firm in his manner to her in what was said and done at the pre‑trial conference and he reassured her that Mr P Kakulas had never at any time instructed him to make sure that she settled, that he regarded himself as independent of the defendant and he regarded himself as her independent advice.
He agreed that prior to her signing the consent judgment, he did recommend that the offer be accepted because it was within the range and when he telephoned Mr P Kakulas to speak to her, he recalled saying to Mr P Kakulas that it was within the range and that he recommended settlement.
Mr P Kakulas agreed that there had been a telephone attendance on the client while she was at the pre‑trial conference and his telephone attendance memo is Exhibit XX and is as follows:
"Ian Marshall to PBK
Increase in offer to $125,000.
I spoke with client. Offer at bottom end of range but risk that she may get less and so should settle her claim. Advice to not accept $100,000 was sound. She is happy to settle now.
Ian recommends settlement."
He said that the plaintiff then attended at his office and he consulted with her from 11.30 to 1.10 pm. She was happy and relieved and no different from when he had previously seen her. She was very pleasant but very talkative.
He did what they refer to in their office as a debriefing and gave her standard advice that is given after settlement.
So far as the plaintiff's allegation that she came to his office angry and aggressive prior to the pre‑trial conference, firstly, he has no recollection of her coming at all. He makes the point that it is four years since all of this happened and the plaintiff had taken the file. Even though there was a notice to her to produce the file, it was not produced in order and it was not all available to him, but as far as he is aware, there was no attendance prior to the pre‑trial conference. There was certainly no attendance in which she said she had a headache, she was not well and she was unable to attend the pre‑trial conference and had that been the case, he would have arranged to adjourn the pre‑trial conference.
So far as the investment of the damages award is concerned, he made enquiries with a Ms Anne Dickerson at Challenge Bank for her. Ms Dickerson gives Mr Kakulas' clients a better rate of interest than they would normally get. He made a note of the telephone call to Anne Dickerson and the rates of interest and gave that to the plaintiff. This is Exhibit ZZ and ZZ(1). The only relevance of this is that the plaintiff said during the course of her evidence, that she did not regard this compromise as hers but as Peter Kakulas' and, accordingly, she found out that the defendant banked with Anne Dickerson at the Challenge Bank, she took the money, put it there and has not touched it for four years. I prefer Mr P Kakulas' version of this supported as it is by the documents.
While the plaintiff was with Mr P Kakulas, he had her go back to Exhibit 4, the original offer to settle, and initial the words "settled at $125,000" which she wrote in.
At the conclusion of the interview, he said she was happy, pleasant, talkative and no different from any other occasion. She thanked him and kissed him as an expression of her gratitude.
The next time he heard from her was when he received a telephone message taken by a staff member, saying that she regretted the settlement. He says that message was dated 14 April.
The plaintiff and Mr P Kakulas agreed that they next spoke to each other by telephone on 14 April. As to that, the plaintiff said:
"I was very angry, and he says, 'You've done contract' - I said, 'You know, if there's any compromise in existence it's yours. It's not mine. Do you understand? I have given you repeated instructions that you are not to compromise my case whatsoever. You've been given no instructions otherwise.' He said, 'You've done contract law' - well, then I knew what had happened. 'You've done contract law. You can't get out of contract.' I said, 'Listen here, you, it's illegal to contract when you're drunk and I may as well have been drunk in my condition.' I said, 'You've breached your fiduciary duty to me.' I said, 'You had better cancel any compromise immediately because I'm going to the Legal Practice Board.' Now, when I mentioned that he said - and I'd already rang them anyway - 'Oh, well, look, if you really, really want me to cancel it, I'd better do it straightaway.' I said, 'Listen, what do you think I've been talking about for the last half‑hour? You'd better do it and do it right away because I'm not accepting anything that is your compromise,' and he said, 'You're being subjective.' I mean, what does he expect anyone to be? I mean, right now I'm more subjective than what I should be because I'm the plaintiff. Difficult to be objective when - it's easy when it's not him. If it was him he would be subjective, too.
So we're just talking about this telephone call in which you're very angry. You told him that any compromise that was in existence was his and not yours?---That's right.
There was some further discussion and he said to you, 'Well, you've done contract law and you know you can't get out of it.' You said, 'Well, you'd better cancel it. I'm going to the Legal Practice Board' and then he said, 'Well, if I'm going to cancel it I'd better do it right away'?---That's what he said, you Honour, and I said, 'Well, these are my firm and specific instructions right now. Don't go contrary to my instructions again.' I did say to him, 'You went contrary to my instructions in that case' and I said, 'These are my further instructions. Do you understand?' because I wasn't - you know, I'm not a confrontationist, but I had had enough of being his victim. I had been brought up to be a lady and not to do your block. To be extremely tolerant, and I had just had enough. I mean, this is a person who is supposedly looking after your interests." (T72)
The plaintiff said that that was the only time she spoke to Mr P Kakulas after the second pre‑trial conference. She had first telephoned on Friday, 11 April, not 14 April as he says and she finally spoke to him on 14 April. The plaintiff further says that it was on 14 April that she had a discussion with Mr T Kakulas as well and the discussion did not take place on 1 May as he said.
Mr P Kakulas' evidence was that she told him that she had been in pain all weekend, she regretted the decision to settle and wanted to have the matter reopened. He advised her that it could not be reopened under any circumstances. The only way to have it reopened was if there was fraud by the defendant or lack of consent by the plaintiff and he said to her that since she was studying, she should go back to the basics of contract law which she knew. She told him that she would not say that any of the elements of contract to give consent were lacking, ie. lack of capacity or drugged from medication. She told him she was not unhappy with the amount. She just felt that it was best to go to court and let an unbiased Judge decide.
She did not say that he had acted contrary to her instructions, nor did she say that she was going to make a complaint to the Legal Practice Complaints Committee. When she eventually complained about him to that Committee, it was the first complaint that had ever been made against him and certainly had she told him at the time, he would have told his partner. She never said that he had breached his fiduciary duty to her.
After some discussion, he said to her that if she wanted to do anything about the matter, she would have to act very quickly and give him firm instructions and he pointed out to her that there were two hurdles to overcome: the first was setting aside the judgment and if that was achieved, then beating the offer of settlement once the matter got to court (see Exhibit 20/1).
On 18 April, he telephoned and left a message for her to call him but he did not hear from her. He rang again and asked her to come in and collect her cheque. In actual fact, she returned the call and saw Mr T Kakulas on 21 April.
Mr T Kakulas also went through what is obviously referred to in the defendant's office as the debriefing and handed over the cheque. He said in evidence that he was aware that she had said she wanted to re‑open the matter but she never mentioned it to him. The interview ended in a friendly way and since he was going out to lunch, they went downstairs together. As they were doing so, she encountered some friends. She introduced Mr T Kakulas not only as her legal practitioner but as one of the State's leading legal practitioners.
The next occasion that they heard from her was on 1 May 1997 when she telephoned Mr P Kakulas.
She complained about the costs and informed him that when she had first seen Mrs Loula Kakulas, she had been quoted a total of $5,000 for the entire solicitor/client costs of the action. Mr P Kakulas told her that they could not give an estimate of costs at that time.
She further told him that she had called him the day after signing to say that she did not want to settle as she had. Mr P Kakulas told her that they had acted in accordance with her instructions and that she had changed her mind after the pre‑trial conference and after she had signed the consent judgment and the authority to settle. The plaintiff told him that she felt she had been done an injustice and was under duress and on Amitriptylene at the time of the second pre‑trial conference but said she would possibly have accepted $150,000.
While this conversation was taking place, Mr T Kakulas overheard it and he could tell from listening to Mr P Kakulas' side of the conversation that he was not making any progress. Mr T Kakulas then took over and spoke to her on the telephone and told her that she was ignoring the negative aspects of her claim and could not work on the proposition that she would win. She had no hope of getting her case re‑opened and should not torture herself.
In cross‑examination, he denied that this telephone conversation occurred on 14 April and said that it was 1 May and rather proudly declared "they're (the records) are as good as you get" (T486). He is probably right about that. The plaintiff said this call was 14 May but she could not remember much of relevance in her conversations with Mr T Kakulas.
The next they heard from the plaintiff is that she asked for the costs to be taxed. The defendant filed a bill at the Supreme Court and the matter was remitted to the District Court and was called on before Deputy Registrar Hewitt.
The plaintiff refers to the "stealing" of a document at the taxation as an indication of Mr P Kakulas' credibility and she called as a witness Deputy Registrar Hewitt. As might be expected, Mr Hewitt did not remember very much at all about the taxation but he did remember that the plaintiff had expressed serious dissatisfaction with Mr P Kakulas although he did not remember the details. He did remember that Mr P Kakulas finally made a commercial decision to settle the matter for what the plaintiff wanted to pay after he made a telephone call to his partner. Mr Hewitt said:
"... During the course of this taxation Mr Kakulas was subject to a number of criticisms ... He clearly wasn't enjoying the experience ... Mr Kakulas eventually decided to thrown in the towel because he was just sick of it ..." (T448)
Mr P Kakulas denied that he had stolen a document while he was in the taxation of costs. The plaintiff attended with documents prepared for the Deputy Registrar which I take it were her submissions. She did not provide a copy to Mr P Kakulas. Mr P Kakulas was, in fact, entitled to a copy. Somehow, the documents ended up in Mr P Kakulas' file. It is his state of belief that at one stage, he gave his file to the Deputy Registrar and when it came back, it must have had the document in it but however it got into his file, he did not "steal" it.
I have no doubt that Mr P Kakulas is telling the truth about this matter. There would be no point in him trying to steal this document. He would be entitled to demand a copy of it from the Deputy Registrar. No party is entitled to put before a Registrar or a Judge any document that the other party has not seen. If that were to happen, it would not be necessary for the other party to then "steal" the document, all that would be necessary is to demand a copy of it or to demand that, in this case, the Deputy Registrar hand the document back to the plaintiff until she provided the defendant with a copy of it.
Another allegation that the plaintiff makes against Mr P Kakulas as going to his credibility is an allegation that he endeavoured to obtain money that he was not entitled to: On 5 February 1997, Mr P Kakulas had the plaintiff sign Exhibit J, which is a list of special damages and on that list is Item 9 - "Dr Rick Stell report 17/10/95 prepaid 31/10/95 $280.00".
On the same day, Kakulas & Kakulas faxed Exhibit 27 to the insurance commission and that refers to Dr Rick Stell's report being prepaid and claims $280.00. The decimal point has been slightly extended. The plaintiff has convinced herself that the defendant tried to claim $2,801 from the insurance commission. This is not so. There is no way the insurance commission would pay this money to any firm of solicitors without accounts and receipts.
The plaintiff is particularly incensed about the reference to the fact that in the memo to Mr Marshall (Exhibit VV), it is said that she would make a poor witness. She does not understand that that is an assessment that a common law solicitor has to make about a client and it was an accurate assessment. I suspect that when she found that note in the file, she thought that Mr P Kakulas would not admit this, so she added to her evidence the fact that on each occasion when she went into his office, in strategic places on his desk, he had notices on pink pieces of paper saying words to the effect "The plaintiff would make a terrible witness". These were part of his pressure building upon her to settle.
As I have already recorded, there is a note to Mr Ian Marshall with the expression of the view that the plaintiff would not be a good witness. In evidence, Mr P Kakulas said that he had actually discussed that with the plaintiff and said that he did not think she would be a good witness because she had a tendency to go off on a tangent. He said, at the time, she did not appear to be troubled by what he was saying to her and they got on very well. When she is being reasonable, I think the plaintiff would concede that she does tend to go "off on a tangent". In any event, she does.
Exhibit 3 which was in the file when the plaintiff collected it says, inter alia:
"Carol's father died last week of mesothelioma.
Carol still has pains in her hands although it has improved.
She saw Dr Fisher recently who appears to not believe her and she is angry because she is telling the truth. Dr Fisher would not give her a disability certificate for her to obtain social security disability benefits.
She spoke with Dr Fisher at length that he appears to believe she is not genuine ..."
This also has a note on it from the plaintiff which reads "PBK is utterly disgraceful - what a penchant for mendacity".
The plaintiff denies that she ever told Mr P Kakulas this about Dr Fisher and further says that one of the pink slips left in a strategic spot on Mr P Kakulas' desk, when she went for interviews, was a piece of paper that said "Carol said her doctor does not believe her".
The plaintiff said that eventually, she challenged Mr P Kakulas about these pieces of paper and he told her that she should settle out of court. She said that she would not settle. He said "What if you were made a really good offer and if you go to court and you get less you would have to pay costs, what would you do if you lose" and she said that she would appeal and he said what if she lost the appeal and she said she would go to the High Court. Mr P Kakulas said in evidence that he did, in fact, recall the discussions about appeals and appeals to the High Court but he thought that conversation was on 1 May.
Mr P Kakulas denies that he left pieces of paper lying around in strategic positions to put pressure on the plaintiff or for any other reason. It does not make sense to me. There is no point in it. I accept his evidence without hesitation.
The plaintiff also takes exception to the fact that in that memo (Exhibit 3) are the words "Carol's father died last week of mesothelioma" and says that Mr P Kakulas asked her if she had brothers and that his respect for her went when he discovered that she had no male who was likely to give her advice.
Another matter about which the plaintiff says that pressure was put on her is a further telephone message which is in the file but which she says was left out for her to see. The messages was dated 13 February 1995 (it should be 1996) and it says:
"Got into law school at Murdoch. Took herself off Amitriptylene and has not slept for three days (??? manic depressant). Advised her not to go off medication without her doctor's advice.
She must go and see doctor re not sleeping for three days."
When the plaintiff saw this, obviously she overlooked the fact that it was a different handwriting and that it was said to be a message to "JM" and was signed "J Maher". Until toward the end of the trial when the plaintiff realised that this message was in Jennifer Maher's handwriting, she was incensed about the fact that Mr P Kakulas was accusing her of being a manic depressant.
Ms Maher did not give evidence, but from the memo, she was not accusing the plaintiff of being a manic depressant. Ms Maher was a young lawyer and when the plaintiff said that she had been on Amitriptylene, she obviously queried whether this was some sort of medication for manic depression and may well have checked the matter with somebody else in the office. It is necessary for a solicitor to know about the mental state of their client. No doubt the plaintiff has poured over the rest of the file and there is no reference to this anywhere else in the file and I do not understand the plaintiff's attitude to it. It is not suggested that the plaintiff has a bi‑polar disorder.
On the final day of the hearing, the plaintiff announced that she had seen this somewhere else in another memo in Mr P Kakulas' handwriting. She is mistaken.
In addition to the matters to which I have already referred, wherever the evidence of the plaintiff and any other witness is in conflict, I prefer that other evidence. It is difficult to know how vulnerable the plaintiff is, but, in any event, it is my duty to do justice between the plaintiff and the defendant and that means doing justice not only to the plaintiff, but also to the defendant. The plaintiff is an attractive, articulate, obviously intelligent woman with flashes of great charm, but for reasons of her own, she appears to have convinced herself that things have happened that simply did not happen. The plaintiff has deconstructed the file after the event and misunderstood much of what she found in it. Many of the things of which she accuses the defence would have been pointless even if they were endeavouring to force her into a settlement for some greedy purpose of their own which proposition I reject.
The manner and the demeanour of the two solicitors and the barrister who acted for the plaintiff and about whom she now complains was of considerable gentleness and I reject the proposition that they bullied her or stood over her in any way at all.
As I said in opening, the Writ claims damages for breach of contract and breach of fiduciary duty and further particulars of that are provided in the Amended Statement of Claim:
"5.At all material times and, in particular following the first Pre‑Trial Conference in the District Court proceedings, the Plaintiff instructed the Defendant:
(a)not to compromise the District Court proceedings; and
(b)that she wished to have her claim assessed by a Judge and that the District Court proceedings, therefore ought to proceed to trial.
6.Consistent with the instructions pleaded in paragraph 5 hereof, the District Court proceedings proceeded from a Pre‑Trial Conference on 19 February 1997 to a Listing Conference on 7 April 1997. At that Listing Conference the Principal Registrar of this Honourable Court ordered that a further Pre‑Trial Conference ('the further Pre‑Trial Conference') be convened and that Conference proceeded on 10 April 1997.
7.The Plaintiff was not notified by the Defendant of the date of the further Pre‑Trial Conference until she received a letter from Kakulas & Kakulas at approximately 9.10 a.m. on the morning of the further Pre‑Trial Conference. That morning the Plaintiff had ingested the following mood altering medications:
(a)Amitrypthyne (sic),
(b)Inderal,
(c)Mersyndol, and
(d)
NaprosanNurofin,collectively 'the medications'.
9.8. Prior to attending at the further Pre‑Trial Conference with I L K Marshall, of Counsel, the Plaintiff attended on the Defendant. The Plaintiff told the Defendant that:(a)she had a severe migraine;
(b)if it were not for the migraine, the Plaintiff would have been at University and not known about the further Pre‑Trial Conference;
(c)she had taken mood altering medication that morning and the previous evening.
10.9. The Plaintiff attended the further Pre‑Trial Conference and compromised her claim in the District Court proceedings.11.10. By reason of the matters pleaded in paragraphs 5, 6, 7, 8, and 9and 10hereof, the Defendant failed (in breach of the implied term of the retainer pleaded in paragraph 3 hereof) to exercise all due care, skill and attention by not:(a)enquiring of the Plaintiff as to the effects of the mood altering medication; and
(b)ensuring that, in accordance with the Plaintiff's instructions, Counsel was instructed:
(i)that the Plaintiff had taken mood altering medications;
(ii)not to compromise the Plaintiff's claim in the District Court proceedings; and/or
(iii)not to compromise the Plaintiff's claim in the District Court proceedings prior to enquiring of the Plaintiff as to the reason/s why she had changed her instructions for those set forth in paragraph 5 hereof.
12.11. Further and/or alternatively to the matters pleaded in paragraph1110 hereof, the Defendant acted in breach of the fiduciary duty owed to the Plaintiff by acting contrary to her instructions (as set forth in paragraph 6 hereof) in permitting the settling of the District Court proceedings.13.12. By reason of the Plaintiff compromising her claim (as pleaded in paragraph109 hereof) for the sum of $125,000, the Plaintiff has forever lost the opportunity of prosecuting the Plaintiff's claim at trial and receiving an award of damages in excess of $125,000 by reason of which the Plaintiff has suffered loss and damage, full particulars of which will be provided prior to the Pre‑Trial Conference."It can be seen from these reasons that none of those particulars are made out and the plaintiff's claim therefore fails.
Given the findings I have made, I have determined not to assess damages. There is sufficient material to enable that to be done from the papers if necessary.
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