Vella v Michael John Bowden of Cannon Bowden and Co [No 3]
[2014] WASC 98
•1 APRIL 2014
VELLA -v- MICHAEL JOHN BOWDEN OF CANNON BOWDEN & CO [No 3] [2014] WASC 98
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 98 | |
| Case No: | CIV:1709/2010 | 21 & 22 JANUARY 2014 | |
| Coram: | KENNETH MARTIN J | 1/04/14 | |
| 30 | Judgment Part: | 1 of 1 | |
| Result: | Action dismissed Judgment for the defendant | ||
| B | |||
| PDF Version |
| Parties: | JOSEPH B VELLA MICHAEL JOHN BOWDEN OF CANNON BOWDEN & CO |
Catchwords: | Damages Solicitor and client Retainer agreement Fixed fee Alleged overcharging Alleged failure to cause funds to be placed in an interest bearing trust account Alleged failure to pursue stolen chattel property |
Legislation: | Nil |
Case References: | Giannarelli v Wraith (1988) 165 CLR 543 Helton v Allen (1940) 63 CLR 691 Josifovski v Velevski [2013] NSWSC 1103 Mickelberg v Director of Perth Mint [1986] WAR 365 Rasmanic v Jurewitsch [1970] 1 NSWR 650 Re Nicholson [2004] QSC 480 SAS Global Forrestdale Pty Ltd v Towton Investments Pty Ltd [2010] WASC 167 Troja v Troja (1994) 33 NSWLR 269 Vella v Michael John Bowden of Cannon Bowden & Co [2011] WASC 78 Vella v The State of Western Australia [2006] WASCA 129 Vella v The State of Western Australia [2006] WASCA 177 Vella v The State of Western Australia [2006] WASCA 30 Vella v The State of Western Australia [2007] WASCA 59 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MICHAEL JOHN BOWDEN OF CANNON BOWDEN & CO
Defendant
Catchwords:
Damages - Solicitor and client - Retainer agreement - Fixed fee - Alleged overcharging - Alleged failure to cause funds to be placed in an interest bearing trust account - Alleged failure to pursue stolen chattel property
Legislation:
Nil
Result:
Action dismissed
Judgment for the defendant
Category: B
Representation:
Counsel:
Plaintiff : In person
Defendant : Mr P D Quinlan SC
Solicitors:
Plaintiff : In person
Defendant : MDS Legal
Case(s) referred to in judgment(s):
Giannarelli v Wraith (1988) 165 CLR 543
Helton v Allen (1940) 63 CLR 691
Josifovski v Velevski [2013] NSWSC 1103
Mickelberg v Director of Perth Mint [1986] WAR 365
Rasmanic v Jurewitsch [1970] 1 NSWR 650
Re Nicholson [2004] QSC 480
SAS Global Forrestdale Pty Ltd v Towton Investments Pty Ltd [2010] WASC 167
Troja v Troja (1994) 33 NSWLR 269
Vella v Michael John Bowden of Cannon Bowden & Co [2011] WASC 78
Vella v The State of Western Australia [2006] WASCA 129
Vella v The State of Western Australia [2006] WASCA 177
Vella v The State of Western Australia [2006] WASCA 30
Vella v The State of Western Australia [2007] WASCA 59
- KENNETH MARTIN J:
Introduction
1 These reasons deal with the residual issues in this action by Mr Vella who, at all times, has acted for himself in person. Mr Vella is currently serving a custodial sentence of strict security life imprisonment with a minimum term to be served of 20 years' imprisonment (with eligibility for parole) by reason of his conviction for the wilful murder of his wife, Ruth Vella.
2 Mr Vella was convicted by a Supreme Court jury on 11 March 2005 after a four-day trial. The defendant had acted as Mr Vella's counsel at the trial. At his sentencing for wilful murder, Mr Vella then pleaded guilty to, and was convicted of, one count of assault occasioning bodily harm and two counts of breaching a violence restraining order.
3 Mr Vella remains incarcerated at Casuarina Prison.
4 Subsequent to his conviction and incarceration, Mr Vella brought a number of claims against the defendant, a substantial part of which I struck out as an abuse of process: see Vella v Michael John Bowden of Cannon Bowden & Co [2011] WASC 78, confirmed by the Court of Appeal in Vella v Bowden [No 2] [2012] WASCA 271. That left some residual money claims which I programmed for trial in the latter part of last year. Notwithstanding Mr Vella's application to have his much more confined claim remitted to the Magistrates Court, I considered it appropriate to case manage the matter to a speedy resolution in the Supreme Court.
5 Pursuant to those programming orders, affidavits were sworn by each of the parties to stand as their evidence in chief and compiled by the defendant into a book of affidavits. Mr Vella's affidavit sworn 28 August 2013 was tendered as exhibit 1. Mr Bowden's affidavit sworn 7 October 2013 became exhibit 3. This included, as attachment A, a witness statement of some 96 paragraphs. Both parties attended court and were cross-examined.
6 Mr Vella also sought leave to rely on further affidavits sworn by him on 16 November 2010 and 25 January 2011, found in vol 2 of the Green Appeal Books in his appellate proceedings, CACV 39/2011. This application was opposed by the defendant.
7 Following submissions from the parties on the first trial day, I refused Mr Vella's application, albeit with leave for him to tender specific attachments to his earlier affidavits if they had some relevance to his remaining claims. By consent, some of these documents were tendered as part of exhibit 1. These were documents which Mr Vella referred to in, but did not attach to his 28 August 2013 affidavit, and which the defendants had included in the book of affidavits.
8 The matters left to be resolved are, essentially, three civil money claims of Mr Vella against the defendant. A core allegation underlying these money claims repeatedly asserted by Mr Vella (acting without legal assistance) is that they are grounded upon the negligent and/or fraudulent conduct of the defendant.
Mr Vella's claims: underlying facts
9 The events which ultimately led to Mr Vella's March 2005 conviction for wilful murder unfolded across 29 December 2003 at St Ives Loop, Kallaroo, where he had resided with Mrs Vella and their four children. Events underlying Mr Vella's wilful murder conviction and subsequent unsuccessful appeals against conviction and sentence are found in numerous earlier decisions of this court: see Vella v The State of Western Australia [2006] WASCA 30; Vella v The State of Western Australia [2006] WASCA 129; Vella v The State of Western Australia [2006] WASCA 177; and Vella v The State of Western Australia [2007] WASCA 59. Put shortly, Mr Vella killed his wife in the early hours of 29 December 2003. It would appear that he was swiftly arrested, taken into custody and charged very shortly thereafter.
10 Between 31 December 2003 and 22 April 2005, the defendant, then a legal practitioner working in the field of criminal law, acted for Mr Vella as his solicitor and trial advocate, pursuant to a retainer agreement. The agreement primarily concerned the defendant advising and representing Mr Vella in respect of his defence of the wilful murder charge he then faced. The defendant is currently a serving Judge of the District Court of Western Australia, having been appointed in March 2007.
Alleged overcharging
11 Highly relevant to the present litigation by Mr Vella against the defendant is the fact that both men accept they met for the first time on 31 December 2003, at Hakea Prison. After receiving a phone call whilst on leave at home, the defendant had attended upon Mr Vella at Hakea Prison. There ensued the defendant's first face-to-face consultation with Mr Vella, who was then remanded in custody.
12 Both Mr Vella and the defendant accept that an oral retainer agreement engaging the defendant's professional services as a lawyer and advocate was perfected at the 31 December 2003 meeting at Hakea. However, there is a fundamental disagreement as to the terms of what remained as wholly oral arrangements.
13 According to Mr Vella, the defendant had verbally agreed to defend and represent him at trial, for the all-inclusive fixed amount of $11,000. I refer in that respect Mr Vella's affidavit sworn 28 August 2013 (being part of exhibit 1) at par 3. But according to the defendant, the amount of his retainer had been verbally agreed at the amount of $15,000, plus GST - ie, a total amount of $16,500 GST inclusive: see the defendant's witness statement, attachment A to his affidavit of 7 October 2013, at par 5.
14 The defendant described the scope of his proposed engagement in 2003 (par 5) as:
This included all work up to and including a trial, irrespective of the length of the trial.
15 The monetary level of an agreed retainer amount on 31 December 2003 is, therefore, a key issue in dispute. In effect, there is a direct clash of written evidence as between the only two men present at their first meeting of 31 December 2003.
16 The level of the retainer was not documented by the defendant at the time, although its terms became the subject of subsequent correspondence in 2005.
17 So Mr Vella asserts, in effect, that he was overcharged. Mr Vella accepts he caused to be remitted to the defendant to cover the fee for his legal representation, funds exceeding $11,000. This was to the extent of a further amount of $5,564.20 which, it is accepted, was received by the defendant during February 2005 (with Mr Vella's defended wilful murder trial looming to commence in early March 2005).
Alleged failure to invest money in an interest bearing account
18 Whilst he was awaiting trial in March 2005, Mr Vella was remanded in custody. In the period between 31 December 2003 to 16 March 2005 there were many face-to-face conferences, written exchanges or telephone calls as between Mr Vella and the defendant. Throughout this period, Mr Vella sought and received the defendant's professional advice upon numerous ancillary issues concerning various land and personal property matters which had arisen in the aftermath of 29 December 2003.
19 One issue that arose concerned a required 2004 sale of the Vellas' St Ives Loop property at Kallaroo. Prior to 29 December 2003 the Kallaroo family residence had been owned by Mr and Mrs Vella together as joint tenants. Where property is owned under a joint tenancy, the legal principle of survivorship will ordinarily apply if one of the joint owners dies. The consequence is that the interest of a deceased joint tenant will pass at death to the remaining joint owner or owners of the property. But in circumstances where a joint owner of property suffers death at the hands of the other joint owner, ordinary survivorship principles may be rendered inapplicable.
20 With Mr Vella incarcerated and facing his murder trial in 2005 by reason of the death of his wife at his hands, issues arose throughout 2004 concerning the possible claims of his late wife's estate to all or part of any sale proceeds of the Kallaroo property.
21 There appears to be no issue that the Kallaroo property needed to be sold and sale proceeds realised. As to a sale process itself, it would appear Mr Vella's sister-in-law (who I will refer to as 'Mrs B') had been engaged as a sales commission agent, under some form of commission/agency arrangement to find a purchaser.
22 A related issue at the time also arose concerning the welfare of Mr and Mrs Vella's four young children. With the death of Mrs Vella and incarceration of Mr Vella before his trial, arrangements needed to be made to secure the children's welfare. Wayne and Lorelai Burns, who were either relatives or friends of the Vella family and residents of New South Wales, had assumed responsibility for the guardianship and care of the Vellas' four children. A firm of New South Wales lawyers, Coode & Corry, represented the Burns in that capacity.
23 At various points during 2004 Coode & Corry liaised with the defendant, who was at the time practising under the name of Cannon Bowden & Co, in relation to a proposed deployment of the proceeds of a sale of the former matrimonial home at Kallaroo.
24 A buyer was eventually found for the Kallaroo property. Settlement was effected in late July 2004, thereby realising aggregate proceeds of $569,000 (see attachment 24(a) exhibit 1, at page 45 of the book of affidavits).
25 After protracted communications in 2004 passing between the defendant's office, Coode & Corry and the Public Trustee, arrangements were finally agreed for the defendant's firm to receive and hold the proceeds of the sale of the Kallaroo property. But the defendant, importantly, would hold the funds in the capacity of a stakeholder. The receipt was on the basis that funds were to be disbursed in accord with agreed arrangements, as recorded by the terms of a deed – which terms were being circulated as a draft, pending the Burns' and Mr Vella's final agreement to the draft terms.
26 The defendant's firm received a bank cheque on 26 July 2004. Settlement proceeds were placed into the defendant's trust account (ie, banked) on 29 July 2004. They were not banked into an interest-bearing trust account. The defendant expressly advised Mr Vella of this no interest position by correspondence of 26 July 2004 (see MJB 29, exhibit 3, book of affidavits at page 130).
27 Hence, it is apparent that, as at 26 July 2004, it was the defendant's expectation that terms of a proposed draft deed as circulated were relatively uncontroversial and, by extension, that the funds he now held as stakeholder were imminently to be disbursed, in accord with terms of a finalised deed.
28 Regrettably, as things turned out, the terms of a proposed deed were not finalised until 13 October 2004 (see exhibit 1, book of affidavits, pages 17 - 20, and exhibit 3, book of affidavits, pages 144 - 147 and 149 - 152).
29 The interrupting factor to an earlier finalisation of the draft deed was Mr Vella's objection to a proposed recital E in the draft and a related cl 3. Draft recital E read:
E. If Vella is convicted of the death of his late wife Ruth Thirze Vella then the lawfully appointed representatives of the estate of his late wife (hereinafter called 'the estate') would be entitled to bring a claim to declare at least half of the proceeds of sale of the property to form part of the estate.
30 Much correspondence ensued between the parties' legal representatives over the period late July 2004 and mid-October 2004, concerning Mr Vella's objections to recital E and clause 3 of the draft. Ultimately, his objection was resolved by the crossing out of recital E and its excision from the deed. Clause 3, however, of the draft remained.
31 There was also a required augmentation to a blank space in the draft deed left in substantive clause 1 of the deed, to insert a nominated amount, which became in the end $500,000. In a photocopied facsimile of the deed found in the book of affidavits a numbered amount appearing below Mr Vella's initials presents as '$500,00' (sic). Plainly, however, the intended reference was to the amount of half a million dollars. See, in that regard, page 146 as compared with pages 19 and 151 in the book.
32 Mr Vella's ongoing concerns about (the ultimately excised) recital E present as somewhat difficult to comprehend. That is particularly so, bearing in mind the substantive content of cl 3 in the operative part of the deed, which remained. Clause 3, making essentially the same legal point, read:
Burns acknowledges that in the event of Vella's conviction the State is able to seek a declaration from the Supreme Court of Western Australia that half the proceeds advanced to them form part of the estate [ie, of the late Ruth Vella]. In the event that such an Order is made Burns agrees they will thereafter hold that part of the funds in trust for the estate and at the direction of the representatives of the estate.
33 The last sentence of the defendant's letter to Mr Vella of 26 July 2004 concerning the draft deed, a copy of which he enclosed with his letter to Mr Vella, had optimistically said:
As far as the Deed is concerned I don't think there are any difficulties with it and I look forward to hearing from you.
34 See also MJB 29, exhibit 3, at page 130 of the book of affidavits.
35 By that same letter the defendant had advised Mr Vella explicitly as regards the settlement proceeds of the sale of the Kallaroo property:
I will pay this into our trust account but you must understand that lawyers' trust accounts do not attract interest so it does not actually earn any interest whilst it is in our trust account.
36 Hence, the second of Mr Vella's residual monetary claims put against the defendant is a claim for lost interest on the settlement amount of $568,688.21, calculated over a period between 29 July 2004 to 4 November 2004 at a rate of 6% as compound interest, with annual rests. This generates in a claim for lost interest in the amount of $15,039.82 (calculated, as I assess Mr Vella's figures, up until 4 May 2013).
Mr Vella's abandoned claim (at trial) to $393.71 interest
37 During the course of trial Mr Vella announced he was abandoning the third of his then four money claims, namely, as to compound interest he claimed in the amount of $393.71 (ts 33).
38 This was another loss of interest claim, now calculated by Mr Vella at 6% upon a capital amount of $1,500. That sum had been requested of Mr Vella by the defendant in 2005, then paid by Mr Vella to the defendant, on the basis of Mr Vella's instructions to file a notice of appeal to the Western Australian Court of Appeal challenging Mr Vella's wilful murder conviction.
39 The defendant had continued to represent Mr Vella in relation to his sentencing following conviction. But at the end of the sentencing process the term of the initial retainer had expired.
40 In relation to any appeal against conviction, the defendant had requested and then received from Mr Vella $1,500, on account of his costs of that fresh engagement. However, the defendant filed a document commencing the appeal process for Mr Vella but Mr Vella very shortly thereafter proceeded to represent himself at all his appeals.
41 Subsequently, after a complaint, the defendant voluntarily repaid the $1,500 amount to Mr Vella, thereby obviating the need for taxation, as had then been initiated by Mr Vella.
42 Mr Vella had still pursued a claim for compound interest on the $1,500. Abandoning that claim during his cross-examination at trial Mr Vella described the claim as petty as, indeed, it was.
43 Having now been so abandoned, there is no need to say anything further about it.
Missing chattels claim
44 The last of Mr Vella's three live money claims arises out of contentions that certain chattel property, once present at the matrimonial home in Kallaroo, was stolen. Mr Vella puts a very broad estimate of his assessed value of this chattel property in aggregate, as $25,000. Upon that estimate amount he again claims compound interest at 6% with annual rests, as ultimately reflected in the claim for $42,236.97, to a period in 2013.
45 The defendant's alleged responsibility for Mr Vella's asserted loss by theft of chattel property commences on the basis of a very serious allegation put by Mr Vella that this allegedly missing property from the Kallaroo property had been stolen by his sister-in-law, who I will refer to as Mrs B. Mr Vella did not instruct the defendant during the 2003 - 2005 period of the retainer to commence proceedings against Mrs B for recovery of the allegedly stolen chattel property. Nor did Mr Vella instruct new solicitors he appointed, engaged subsequent to his wilful murder conviction in 2005, to sue Mrs B. No proceedings were ever brought against her by Mr Vella.
46 Nevertheless Mr Vella still attributes civil responsibility to the defendant for his asserted loss, on the basis of an asserted failure in 2004 to send a second letter to Mrs B about the issue of missing chattel property from the Kallaroo home.
47 It is not in dispute the defendant had, at Mr Vella's behest, written one letter to Mrs B of 21 June 2004 (see exhibit 3, attachment MJB47, in the book of affidavits at pages 156 – 157). The letter had been couched in very careful terms. At that time Mr Vella was still to stand his wilful murder trial. His sister-in-law was a possible prosecution witness at Mr Vella's trial. Mrs B had unexpectedly encountered her late sister's battered body at the Kallaroo home when she attended at some point on 29 December 2003.
48 The defendant's 21 June 2004 letter to Mrs B had addressed the issue of allegedly missing items of personal property from the home, as asserted by Mr Vella (including silk rugs, necklaces, earrings, rings, bracelets, watches, perfume, gold chains, after shave, alcohol, digital cameras, a lawnmower and a home gym). The letter had ended:
Would you please provide us with a complete list of all the items that have been taken because these need to be declared.
49 Mrs B responded swiftly. On 22 June 2004 (see exhibit 3, MJB49, book of affidavits, pages 159 – 160) she replied to the defendant that she had no knowledge of most items listed, with some exceptions. In particular, Mrs B identified some items of jewellery which had been returned by her to police forensics, including a gold necklace and gold earrings. She said a Mary Hilberding, Mr Vella's sister, would take possession of the jewellery items now returned from police forensics, 'on arrival in Perth next week'.
50 The defendant on 24 June 2004 sent a copy of Mrs B's response about the missing chattels to Mr Vella at Hakea.
51 On 26 June 2004 Mr Vella prepared a longhand note for the defendant (see MJB51, exhibit 3, book of affidavits, pages 162 - 163). By that note he wrote:
Michael
Thank you for forwarding [the] letter.
Could you please send her another letter asking her to reply to the items on the list as 'I have removed them' and 'know of their removal' (her family) or 'I sent them to Sydney' and 'don't know'.
Re the red silk carpet value $3000, she told the [indistinct] that she vomited on it, tried to clean it and then threw it away!! Ruth was in the bedroom, how she managed the 30 metres to lounge?? The box necklace, she returned the cross that was attached to it to my sister Josephine but not the necklace!
52 On 30 June 2004 the defendant now wrote back to Mr Vella concerning that 26 June 2004 longhand note. The defendant was clearly troubled by an instruction to send a further letter to Mrs B, effectively a letter of demand, as the deceased's sister and looming prosecution witness at the 2005 murder trial. The defendant spelled this concern out in clear terms to Mr Vella, advising:
There is also however a tactical consideration, quite frankly if it came out at the trial where you are charged with wilful murder of your wife we are then involved in arguing over property then it may appear to the jury [relatively] petty.
You will appreciate that different jurors would have different approaches. But all I am saying is if it [emerges] at the trial under cross examination or otherwise argument between yourself and one of the witnesses, over the property over your deceased wife, I just don't know whether it would sit very comfortably with some of the members of the jury.
I really do think that we should couch it in some neutral terms, just saying something along the lines of 'Look, we just need an itemisation of the items of property that are in your possession.' Even if we put it on that we are not asking for them to be [returned], but we do need itemisation of items that she has taken, something along those lines rather than making straight out accusations.
But I just don't think we should just devote [too] much time to this type of writing back and forward because it just tends to end up in a war of correspondence and I don't know whether at the end of the day it actually gets us anywhere.
So please contact me (I did try and ring you back the other day. but I couldn't get through to you).
May I please hear from you.
53 (See MJB52 in exhibit 3, book of affidavits, pages 164 - 165.)
54 On 19 July 2004, Mary Hilberding advised Mr Vella by email that she had been given a list of items of property by Mrs B. These were items of gold jewellery and costume jewellery as listed. There is no complaint by Mr Vella over a loss of this jewellery (see MJB53, exhibit 3, book of affidavits, pages 166 - 167).
55 Once the appeal had been filed, the defendant filed a notice advising that he was ceasing to act for Mr Vella on 8 April 2005, and served on the Director of Public Prosecutions on 11 April 2005. Mr Vella then commenced to represent himself in conducting all his appeals against his convictions and his sentences.
56 On 1 June 2005 Mr Vella, now at Canning Vale Prison, wrote to the defendant as his former legal representative. He requested a copy of the second letter to Mrs B and which he said 'we spoke over the phone about' (see MJB54 in exhibit 3, book of affidavits, page 168).
57 On 3 June 2005 the defendant responded to Mr Vella, advising:
I have been through the file and I can't seem to find the second letter that I have sent to [Mrs B]. I may well have in fact overlooked it.
I will go through the file again, but as I have said when I went through it I couldn't find the second letter.
58 See MJB55, exhibit 3, book of affidavits, page 169.
59 Mr Vella's chattel losses claim as is now advanced against the defendant is founded on a factual basis that no second letter was ever sent to Mrs B. On my assessment of the evidence, bearing in mind the defendant's frank response of 3 June 2005 as to his not being able to find a copy of a second letter, on the balance of probabilities, I conclude no second letter was ever sent to Mrs B.
60 It is plain that the defendant, in the period before Mr Vella's wilful murder trial, was undoubtedly, and very understandably, primarily focused upon and concerned with preparing for that trial. He made his concerns about writing again to Mrs B clear to Mr Vella on 30 June 2004. Bearing in mind a paramount importance of that looming wilful murder trial and the allied tactical considerations, fully explained by the defendant's 30 June 2004 letter, it seems to me to be more likely than not that after some verbal discussion between Mr Vella and the defendant subsequent to 30 June 2004, no second letter was sent.
61 Bearing in mind the priorities of the looming murder trial and the tactical responsibilities of the defendant as counsel, the defendant was fully entitled to prioritise such matters whilst conducting Mr Vella's defence. The tactical considerations addressed by the defendant in his letter of 30 June 2004 were logical and very proper considerations to raise at the time.
62 Opening up a pre-trial debate with the deceased's sister over the issue of her vomiting on and then destroying a red silk rug in the living room on a basis his late wife had actually been killed some distance away in another room, with it, therefore, being improbable that Mrs B would have managed to negotiate a distance of 30 m from the bedroom to the lounge before throwing up on the rug - clearly would have been tactically unwise, given the pendency of the murder trial at which Mrs B was a probable prosecution witness.
63 Moreover, had a second letter have been written, bearing in mind the looming murder trial and the tactical considerations raised by the defendant, such a letter would at best have only been couched in most neutral terms - as the defendant's 30 June 2004 letter points out. It would not have been a letter of demand.
64 Subsequent to Mr Vella's conviction in March 2005 he instructed freshly appointed solicitors to write to Mrs B concerning the same allegedly missing items of chattel property - after a complaint to a Detective Hill of the police (see Mr Vella's affidavit, pars 24 - 33, particularly par 25, and Mr Vella's reference to exhibits 8(a) and 8(b) in the book of affidavits, pages 27 - 28).
65 On 22 August 2006 Mr Vella's new solicitors, Dawson & Davies, without the inhibition then of a looming murder trial, wrote to Mrs B and her husband enclosing a further list of goods, concluding:
In regard to the issue of items forming part of [Ruth Vella's] estate please specify which of the items you claim were Ruth's property and consequently form part of the estate. Please note that items that were jointly purchased are our client's by way of survivorship.
66 A response was requested to that letter within 14 days. It seems there was no response.
67 By his affidavit, Mr Vella says no litigation was commenced against Mrs B over the chattels issue. Mr Vella then says (par 29):
I stopped pursuing the stolen property because she would not allow my children to visit me when they came to Perth and with the passing of time she could have disposed of any property and it became harder to prove.
68 At his par 33, Mr Vella concludes:
The defendant had no problem engaging in multiple correspondence with solicitors Coode and [Corry] re the deed whilst he had the proceeds from the sale of the property in his account. However, he neglected to write to [Mrs B] about the stolen property and as a consequence I incurred the losses. Some of the items on the list were later either located or returned by [Mrs B]. Other missing items are not on the list. These include sentimental property.
69 Clearly, there first presents here an underlying issue of causation - as regards the claim concerning alleged stolen property - by reference to the hypothetical effect of a second letter from the defendant to Mrs B in 2004 on that subject had such a letter been sent (my finding being no second letter was sent, due to the defendant's legitimate tactical concerns about its consequences). The causative consequence of a second letter in 2004 to Mrs B and which would have been couched necessarily in neutral terms on this issue, by my assessment, would be highly unlikely to have generated $25,000 worth of chattel property for Mr Vella.
70 This exchange occurred on this topic from Mr Vella during his closing submissions at trial (see ts 137):
KENNETH MARTIN J: Well, to write - it was in his hands to write a letter, which you say he didn't send. Now, what - what consequence, on the evidence, assuming a letter had been sent in neutral terms to [Mrs B], do you really think that that would have produced $25,000 worth of property delivered to your doorstep?
MR VELLA: I do not - not if it's sent neutral, no. Not if it's sent for neutral. I would have - I would have liked a more forceful letter, but I did not know at the time what type of letter you could send and couldn't. I would have preferred a more forceful letter that those were my, or the children's, our legal entitlement. And I was the guardian of the children at the time.
71 I must record at this point the serious character of a stealing allegation put against Mrs B as regards chattel property. (Because of that, I have used her initial only.) Concerning that issue, Mr Vella said during his closing submissions to me (ts 136):
The sad part of this is, your Honour, it might not have been [Mrs B]. Could have been the police. I don't know. I have no idea, because [Mrs B] never gave an itemised list of what was missing.
72 I now proceed to my evaluations of the three residual civil claims.
Determination of the three money claims by Mr Vella
Evaluation of claim 1: Overcharging by $5,554.20
73 There is upon the evidence no dispute about an oral retainer agreement perfected at Hakea Remand Centre as between Mr Vella and the defendant on 31 December 2003. There is no contemporaneous note made in relation to what was discussed at this meeting which, from the defendant's perspective, presents as a little surprising. It may reflect the fact that the defendant was at home on leave when he received Mr Vella's urgent call to visit him at Hakea.
74 Essentially, there presents a stark clash of evidence over what was said about the level of the defendant's fee retainer. This was the first face-to-face meeting between the two men. The meeting occurred within two days of Mr Vella's arrest.
75 The defendant's version of events, by his witness statement, makes reference to the issue of GST being discussed. The defendant was cross-examined by Mr Vella at trial by reference to the content of his affidavit (see ts 74 - 75; in contrast, see Mr Quinlan SC's cross-examination of Mr Vella on the point at ts 41 - 50).
76 Here, I assess it more likely than not that GST was mentioned by the defendant at this first meeting. That favours the defendant's version. The defendant's evidence was also for more cogent on the issue under cross-examination. On this issue I prefer it over Mr Vella's version of events, where it is in conflict.
77 Moreover, the defendant's position that his agreed retainer to defend Mr Vella at trial was agreed at $15,000 plus GST is independently supported in subsequent correspondence.
78 First, I mention the defendant's letter of 20 April 2006 (attachment 24(a), exhibit 1 in the book of affidavits, page 45). Through this document, prepared well after the defendant had ceased to act as Mr Vella's lawyer, the defendant identifies moneys received against moneys disbursed by him in acting for Mr Vella. Relevantly, the defendant identifies receipt of a bank cheque in the amount of $6,000 on 15 April 2004, then a second bank cheque for '$5,154.20' on 3 March 2005. During the trial an error in this figure was pointed out, uncontroversially. It should have read '$5,554.20'. The letter continues that the 'monies we disbursed were as follows' and lists $15,000 having been disbursed to 'Cannon Bowden & Co. fee Re: Trial wilful murder'.
79 Second, the story behind that disbursement appears from the defendant's letter of 1 November 2004 sent to Mr Vella at Hakea Prison. The final paragraph reads:
You will appreciate that as far as the money to your sister is concerned I would also like a further $5000 on account of our costs in this matter to cover our time and the likes. I am wondering if it is appropriate to deduct that before I send the rest to your sister or whether you want me to do it a different way. Perhaps you could let me know.
80 See MJB43 in exhibit 3, book of affidavits, page 148.
81 It appears $5,000 was indeed retained. Having received $568,593.18 as the proceeds of the sale of the Kallaroo property on 29 July 2004, the defendant had disbursed $500,000 (in accord with the terms of the deed) to Mr and Mrs Burns on 4 November 2004 and $63,688.21 to Mr Vella's sister, Ms J Sacco, on the same day. A $5,000 gap in what was in aggregate remitted on 4 November 2004 is effectively a retention of $5,000 by the defendant on account of fees.
82 Third, on 17 February 2005 (with Mr Vella's murder trial, to commence on 8 March 2005) the defendant wrote to Mr Vella at Hakea Prison in terms:
You will appreciate that the Trial is rapidly approaching and I do need the balance of the fees.
When I originally spoke to you I indicated that the total fee would be $15,000 plus GST making a total of $16,500. That included all work done in the past and representation at the Trial. That is irrespective of the length of the trial. I certainly don't think the Trial will take as long as it has been set down.
I quoted the fee originally on the basis that I thought the Trial would be approximately a four day Trial and I still think it will be that length of time. The fee does cover all the work done in the past and representations at the Trial.
I have done additional matters for you along the way such as advice over settlement of the house, advice on the Trustee and the like. I don't propose to charge you anything additional for those but include those in the total fee. I do need the balance of the funds to be forwarded to me.
The total amount we have currently in trust is $10,935.80. The balance payable is therefore $5,564.20. Would you please arrange to forward that to me forthwith.
83 Uncontroversially, the letter's requested amount of $5,564.20 was then remitted, via Mr Vella's sister by bank cheque to the defendant, on 3 March 2005. Nothing was written or said by Mr Vella at the time as to his objecting to the defendant's request for a last tranche of funds as 'the balance of the fees'.
84 Fourth, after Mr Vella had been convicted in March 2005, but before he had been sentenced, there were further communications between the parties, prior to the sentencing hearing, which appears to have occurred some time around 22 April 2005.
85 On 23 March 2005 (MJB64, exhibit 3, book of affidavits, page 181) Mr Vella wrote to the defendant, having now addressed the issue of a possible appeal against his conviction:
In your letter of the 17-2-05 you indicated that the total fee would be $16,500, which I believe I've paid you. I take it total means representation at sentencing as well.
Once again thanks for everything and I hope the character reference letters are coming.
86 On 1 April 2005, the defendant responded to Mr Vella's letter of 23 March 2005, confirming that he had lodged an appeal document on his behalf, on 30 March 2005 (MJB67, exhibit 3, book of affidavits, page 184) . In what is a clear reference to the figure of $16,500 he advised Mr Vella:
The fee that is paid does cover representation at sentencing.
87 Mr Vella's argument, having without demur paid over $5,564 as was requested in the defendant's 17 February 2005 letter, is unique. He seeks to explain his position at pars 5 - 7 of his affidavit.
88 What Mr Vella appears to be contending is that extra funds over and above $11,000 were only paid conditionally to the defendant – and inferentially that if conditions upon which this extra $5,564.20 had been paid were not ultimately complied with by the defendant, Mr Vella was entitled to this money back with compound interest.
89 In legal substance, this claim appears to be for damages by Mr Vella for alleged breach by the defendant of a term of the retainer agreement as varied - by reason of a non-fulfilment of a term concerning alleged extra investigation work for trial the defendant was supposed to carry out pre-trial but, in fact, did not. At pars 5 - 7 of his affidavit Mr Vella says:
I was paying as I had asked him to conduct an investigation at the Glengarry Tavern and to get the telephone records of the deceased and Mr Sousta.
…
At that stage I did not know whether he had followed my instructions. At trial it became evident that he had not. This was further confirmed in his letter of the 3 June 2005.
…
Had the original fee been $15,000 plus GST as he claimed in his letter of the 17 February 2005 he could have charged me the balance when he had the money in his trust fund from the proceeds of the sale of 14 St Ives Loop, Kallaroo.
90 Strictly, a claim for what appears to be contractual breach damages does not fall within the ambit of par 7 of Mr Vella's endorsement which, by my orders of 21 February 2011, became Mr Vella's statement of claim. Paragraph 7 refers only to alleged 'fraudulent conduct' (see also par 6). Such assertions as to fraud are untenable.
91 There can be no proper suggestion of any fraudulent conduct by the defendant as regards the alleged overcharging issue. At best, there would appear to be arguments by Mr Vella as to an alleged breach of a condition in a varied retainer agreement. However, on my assessment, Mr Vella's contention as to a conditional payment has no support on the trial evidence. The written documentation to which I have referred does not mention conditions and is more consistent with the defendant's retainer having been initially agreed in 2003 at the amount of $15,000 plus GST. I so find.
92 There was no immediate objection or complaint by Mr Vella against a request for funds to the extent of $5,554.20 - either before or immediately after the wilful murder trial in March 2005.
93 Testing Mr Vella's version as to the allegedly lower initial level of the defendant's retainer, I would have expected a strong challenge from Mr Vella to the defendant's reference to what he said was the total fee of $16,500 GST inclusive, seen in the 17 February 2005 letter, given Mr Vella's undoubtedly sharp eye for matters of detail. That sharp eye is displayed throughout the passing correspondence between Mr Vella and the defendant over time.
94 I conclude it as being more likely, on the balance of probabilities, that the defendant's version of events as to the agreed level of his retainer at 31 December 2003, is what actually transpired that day at Hakea.
95 Mr Vella's assertions concerning an extra $5,554.20 being agreed to be paid by him in return for extra work were also thoroughly undermined at trial by his cross-examination. No doubt in the context of trial preparation discussions many areas of possible enquiry and examination were discussed in conferences between the defendant and Mr Vella, before his 2005 murder trial. Given the very serious nature of Mr Vella's crime and the underlying circumstances, such conversations would only be expected and routine.
96 However, it was accepted by Mr Vella that these discussions always proceeded on a basis that, ultimately, the defendant as Mr Vella's trial counsel would decide upon the value of any information obtained and how that information would be deployed tactically at a forthcoming murder trial. Such an approach is in accord with the responsibilities of the trial advocate as an officer of the court, classically explained by Sir Anthony Mason in the passage to which I referred from Giannarelli v Wraith (1988) 165 CLR 543 at [66] – [67] in my previous reasons, Vella v Michael John Bowden of Cannon Bowden & Co [2011] WASC 78.
97 There is no independent support for Mr Vella's conditionally varied retainer/breach arguments. Cross-examination highlighted par 6 of Mr Vella's affidavit where he said that it 'became evident' at trial that the deceased had not 'followed his instructions', referring to an investigation at the Glengarry Tavern and of telephone records for his wife and a Mr Susta. Yet following trial there was no complaint from Mr Vella to the defendant about unmet retainer conditions. In fact, the position was quite the contrary (see MJB61 in exhibit 3, book of affidavits, page 178) sent on 19 March 2005. Mr Vella then wrote to the defendant:
I would also like to thank you for representing me in trial and laying such excellent groundwork from the witnesses should an appeal take place.
98 See also ts 48 referring to exhibit 2, a longhand note from Mr Vella referring to a range of potentially relevant enquiries which Mr Vella evidently thought could assist, but with no specific instructions to undertake them. The high water mark of the reference in the note to obtaining Mr Susta's home and mobile phone statements states was that this would be 'handy'. Cross-examination culminated (ts 49):
There was no instructions given to do particular things because you left the strategic decisions up to Mr Bowden; correct?---That is correct.
99 Mr Vella's acceptance of that position stands as directly inconsistent with what is effectively an argument for breach damages, by reason of an asserted failure of the defendant to carry out 'instructions' as regards obtaining phone records and conducting an investigation concerning what happened at the Glengarry Tavern.
100 Even viewed on the most favourable conceptual formulation of a claim for breach damages by Mr Vella, in respect of an alleged overpayment amount, claim 1 must fail.
Claim 2: Further context - alleged failure to invest proceeds of sale
101 The facts underlying this claim as earlier explained show, at highest, that Mr Vella's grievance might be characterised as a garden variety assertion of professional negligence by reason of the defendant allegedly failing to invest funds in an interest bearing account, causing loss to Mr Vella as a co-recipient of the funds. There is no basis again for any assertion as to fraud. The grievance concerns the period between receipt of the funds by the defendant as stakeholder on 26 July 2004 and an ultimate disbursal of the funds on 4 November 2004 (see exhibit 1, book of affidavits, page 45).
102 There is no suggestion of arguable fraudulent conduct on the part of the defendant from these events. That must be so notwithstanding what is put at par 7(ii) of Mr Vella's statement of claim. In fact, if there is any element of deception surrounding this claim it is a deception attributable to Mr Vella, who advances his argument at par 8 of his affidavit grounded upon the defendant's letter of 17 June 2004. That letter did note reference to the possible investment of half the proceeds of the sale of the Kallaroo property into an interest bearing trust account at that time (see exhibit 1, book of affidavits, page 71). But clearly that position was soon overtaken. Mr Vella knows that to be so - yet he persists with a claim grounded on the 17 June 2004 letter.
103 It is quite apparent from the documents that there was an evolving series of negotiations between at least three parties with differing interests at the time concerning rival claims to the proceeds of the sale of the former matrimonial property. As at 17 June 2004, New South Wales solicitors Coode & Corry had been appointed to act for the Burns. Coode & Corry were demanding an undertaking from Mr Vella in relation to any dispersal of the proceeds realised by the sale of the Kallaroo property.
104 It is necessary to assess what was written by the defendant on 17 June 2004 as to investment of half the proceeds of sale into an interest bearing trust account in overall context – as a part of an evolving series of negotiations conducted between the defendant on Mr Vella's behalf, Coode & Corry for the Burns as guardians of the four Vella children, and the Public Trustee. These negotiations eventually culminated in agreement upon a different proposal to that circulating on 17 June 2004 - as reflected in the terms of the deed between Mr Vella and Mr and Mrs Burns. But a finalised deed was only executed on 13 October 2004.
105 Relevant passing correspondence concerning the proceeds of the sale of the Kallaroo property is found in exhibit 3 - by attachments to Mr Bowden's witness statement between pages 99 - 154 of the book of affidavits. A second firm of solicitors, Dawson Davies, was acting as well for Mr Vella at the time concerning family law and restraining order issues (see MJB3, exhibit 3, book of affidavits, page 99).
106 It is particularly telling to note exchanges between Coode & Corry and Cannon Bowden in the period between 8 June and 21 June 2004, as regards the issue as to possible injunctive relief then being sought against Mr Vella. By 21 June 2004, after a personal attendance upon Mr Vella by the defendant, the earlier proposal to put half the funds in an interest bearing trust account had proven very contentious. It was no longer proposed. That day the defendant now wrote to Mr Vella in terms (see MJB14, exhibit 3, book of affidavits, page 113):
I also confirm that as far as the property is concerned your instructions have been as follows:
One half of the property you accept belongs to the estate of Ruth Vella. The proceeds of the remaining half you agree to lend to Lorelai and Wayne [Burns] to enable them to purchase a house interest free to you being repaid within 30 days of your release from prison of the amount that you lent to them. You have explained to me that this will be interest free.
Any money that is not used in the purchase of the house is to be put into an interest bearing trust account in your name. I confirm that I have advised the Solicitors of this fact today and as soon as I hear from them I shall be in contact with you.
107 That revised proposal of 21 June 2004 was acceptable to Coode & Corry that day (see MJB16 and MJB18, exhibit 3, book of affidavits, page 115 and 117). They advised the defendant on 5 July 2004:
Our clients most recently have also advised us that they would wish to utilise the other half of the property that may ultimately form part of the estate of Ruth Vella subject to the outcome of the criminal proceedings. We are instructed they will need the whole of the moneys to purchase another property having regard to property prices in New South Wales.
108 The deed to record the agreement on this issue was then under conceptual discussion. On 13 July 2004 a question as to who would hold the house sale proceeds, pending entry into of the deed, was raised by Coode & Corry (see MJB22, exhibit 3, book of affidavits, page 122). They advised the defendant:
[W]e would prefer either the agent or yourselves hold the funds.
109 The same day (see MJB23, exhibit 3, book of affidavits, page 123) the defendant advised he was
prepared to hold the funds in our trust account as a 'stakeholder' until the deed is entered into.
110 That stakeholder proposal was accepted by Coode & Corry on 15 July 2004. The defendant advised Mr Vella by letter the following day (see MJB25, exhibit 3, book of affidavits, page 125). Mr Vella was informed by the defendant (correctly) concerning his receipt of the funds as a stakeholder:
That means we can't disburse to any party until the deed etc is signed and as soon as I have the money or the deed I will advise you accordingly.
111 The defendant then liaised with the relevant settlement agency, Envoy Settlements (see MJB27, exhibit 3, book of affidavits, page 127). He enclosed an authority dated 20 July 2004, signed by Mr Vella, authorising payment of the proceeds of sale to the Cannon Bowden trust account.
112 On 26 July 2004, the defendant advised Mr Vella of his receipt of the cheque (see MJB29, exhibit 3, book of affidavits, page 130). Mr Vella was also explicitly advised in writing the funds received would be paid into the defendant's trust account and, in particular, that the received funds would not accrue interest.
113 At this time the defendant saw no issues of controversy over the terms of the draft deed which had now been prepared by Coode & Corry and had been sent to the defendant on 22 July 2004.
114 In his 26 July 2004 letter to Mr Vella the defendant concluded, having also enclosed a copy of the draft deed for Mr Vella to review:
As far as the Deed is concerned I don't think there are any difficulties with it and I look forward to hearing from you.
115 Mr Vella merely says by par 9 of his affidavit:
When I signed the authority for the proceeds to be released to the defendant it was on my understanding of the above letter [ie, of 17 June 2004].
116 Unfortunately, that does not tell the full story. Mr Vella's signed authority is dated 20 July 2004 (see MJB27, exhibit 3, book of affidavits, page 128). Events had plainly moved on after the defendant's attendance on Mr Vella. Half the sale proceeds to which Mr Vella might be entitled were going to be advanced by him by way of a loan to Mr and Mrs Burns interest free - so a New South Wales property could be purchased to accommodate his children. Clearly, those funds were no longer going to be invested in an interest bearing trust account pending his murder trial. They were to be disbursed immediately.
117 But as matters developed, a swift disbursal of funds now held by the defendant as stakeholder was inhibited by the non-finalisation of the draft deed - the terms of which the defendant had considered, did not raise 'any difficulties'. Nevertheless, Mr Vella raised concerns over recital E and cl 3 of the draft deed (see MJB31, exhibit 3, book of affidavits, page 132). Mr Vella appears to have instructed the defendant to ask for the excision of recital E and cl 3 (albeit there is an erroneous reference in the communication to Coode & Corry of 3 August 2004 to a recital G; that error as to the recital was subsequently realised and corrected). See an email which is MBJ34, exhibit 3, book of affidavits, page 135.
118 On 10 August 2004, the defendant advised Coode & Corry that Mr Vella was 'insisting' on cl 3 being removed (see MJB35, exhibit 3, book of affidavits, page 136). The defendant concluded that communication of 10 August 2004:
The [sic, they] are his firm instructions.
119 However, cl 3 remained in the deed as finalised.
120 The operative part of the deed as executed, comprises just three clauses. Though there was earlier objection on Mr Vella's part about cl 3 as well, it ultimately remained as drafted. That is apparent from the quote earlier in this judgment.
121 I assess that the stumbling block to the finalisation of the deed to be with Mr Vella's objection to recital E and to cl 3.
122 At the trial Mr Vella said if only he had known that it was as easy as striking through recital E (as ultimately occurred) he would have done that sooner. Regrettably, it is just not as simple as that. The stumbling block was not just recital E. It was cl 3 as well, which at least as at 10 August 2004 Mr Vella was insisting, through the defendant, be removed. In the end it was not.
123 On 12 August 2004, Coode & Corry advised that they were happy to remove recital E. But an excision of cl 3 was not agreed (see MJB36, exhibit 3, book of affidavits, page 137). Mr Vella was so advised on 13 August 2004. Matters appear to have stagnated then, until 25 August 2004. That day Mr Corry emailed the defendant asking whether there were further instructions held by the defendant (see MJB38, exhibit 3, book of affidavits, page 139).
124 On 10 October 2004 Mr Vella wrote to the defendant asking 'what is happening with the deed' (See exhibit 3, book of affidavits, page 140).
125 As a matter of inference, Mr Vella must have resiled from his earlier objection to cl 3 of the draft deed at some time in this period. Apparently, Mr and Mrs Burns by then had found a property in New South Wales. News of this found its way to Mr Vella. He advised the defendant that they 'need the money rather urgently to start negotiating'. Mr Vella wrote to the defendant:
Furthermore as the money is not earning interest in the trust fund is there any legal reasons to either why the money is not released to me to invest or that you can invest it in an interest bearing account? As it is the real winners are the banks!
Lorelai has agreed to borrow 5.5 with the balance being sent to me at my sister's house for future legal and tax bills I might incur. I will explain further when I see you.
126 The defendant sent a photocopy of the deed to Mr Vella at Hakea Prison, observing (see MJB40, exhibit 3, book of affidavits, page 141):
You will appreciate that if you are now minded to sign it, you should ensure that you initial up the very top where I have pencilled the 'X' ie near the date, down the bottom of the page where I have pencilled the 'X' and above the amounts so there is no argument as to the amount of money and then again at the bottom of page 2 and then over at page 3.
127 On 25 October 2004 Coode & Corry by email advised the defendant:
Mr Vella has sent us the counterpart Deed executed by him.
128 It appears Coote & Corry had not then forwarded a counterpart of the deed as executed by their client (Mr and Mrs Burns) - although they foreshadowed that (see MJB41, exhibit 3, book of affidavits, page 142). This occurred that day, with a request the counterpart deed be dated the same date Mr Vella signed his (see MJB42, exhibit 3, book of affidavits, page 143).
129 On 3 November 2004 the defendant disbursed $500,000 to Coode & Corry in accord with the terms of the deed, plus $63,688.21 to Mr Vella's sister, Josephine Sacco, in accord with his instructions (see MJB44 and MJB45, exhibit 3, book of affidavits, pages 153 – 154).
130 The defendant's communication to Ms Sacco noted the defendant was retaining $5,000 in the trust account. Mr Vella was advised the next day by letter (see MJB46, exhibit 3, book of affidavits, page 155).
Determination – Claim 2
131 It needs to be appreciated that the proceeds of sale of the former matrimonial home at Kallaroo were held by the defendant as a stakeholder. A stakeholder is under a duty to hold it in medio pending the outcome of a future event. As Murphy J observed in SAS Global Forrestdale Pty Ltd v Towton Investments Pty Ltd [2010] WASC 167 [47]:
The purpose of paying a deposit to a stakeholder is to ensure that it is in the hands of an independent person who will account to the seller if and when the seller becomes entitled to it. The purchaser, by paying the money in accordance with the terms of the contract, performs its part of the contract and is not bound to pay the sum again to the seller, as a condition precedent to conveyance, should the stakeholder default in accounting for the deposit to the seller: Grant v O'Leary (1955) 93 CLR 587 (593 - 594).
132 Where a solicitor receives a large amount of money on behalf of a client it is ordinarily prudent to discuss with a client arrangements concerning a potential investment of the money, so that interest might be earned. That is particularly the case where large amounts of funds are received, in circumstances where the duration of the holding of the funds by the solicitor may be either long-term, or uncertain.
133 Here, because the defendant was a stakeholder, he could have only arranged for funds he held to be invested with the consent of all relevant interest holders in the funds, not just at the unilateral behest of Mr Vella.
134 It is clear when the defendant received the cheque for the settlement funds from the settlement agency at the end of July 2004, his expectation was that the bulk of the funds would be disbursed from his trust account in the short term. He explicitly advised Mr Vella of the fact the funds he now held were not earning interest. However, obstacles to the funds being disbursed immediately after their receipt then emanated, substantively on any assessment, from Mr Vella.
135 Unlike the defendant, Mr Vella was unhappy with the proposed terms of the draft deed, as to recital E and cl 3. Coode & Corry eventually gave ground, as regards recital E during August 2004. But cl 3 remained an obstacle. This was not, as Mr Vella seemed to express during trial, simply a matter of Mr Vella putting a line through recital E, then initialling at the margin of the deed. The remaining stumbling block was cl 3 in the deed. The impasse had to be resolved.
136 Looking at events now with the wisdom of hindsight, it might be said the settlement funds, upon the received consent of all relevant interest holders, might have been moved to an interest bearing trust account.
137 On my assessment of events as they unfolded across July 2004 to November 2004, the terms of the draft deed ought not to have been problematic. They became so due to Mr Vella. Plainly, the defendant did not expect his position as stakeholder of funds to be long-term. Mr Vella was no fool. He was explicitly advised of and, in my view, fully understood, that these sale proceeds were not earning him interest whilst held in the defendant's ordinary trust account.
138 It is also necessary to point out that there was never any benefit received by the defendant by reason of settlement funds being held in his trust account. He was, of course, providing a stakeholder service. He did not benefit personally.
139 At best, Mr Vella might contend for a garden variety common law negligence claim by reason of the settlement funds not being moved to an interest bearing account in this period. Such a funds movement, however, would have required consent from Coode & Corry, acting as solicitors for the Burns. It is by no means obvious, or to be assumed, that had a request been made by the defendant to Coode & Corry to move the stakeholder funds into another (interest bearing) trust account, on a basis that it was taking longer than had been originally foreseen to finalise the terms of a deed between the parties, such a proposal would have been agreed to.
140 There arises also the issue of potential tax implications of such an investment needing to be considered, as the defendant points out.
141 In all the circumstances, I conclude that arguments of, at least, professional negligence grounded on an asserted failure of the defendant to invest the funds to derive interest for the stakeholder parties, to be meritless. At best, such criticism is a hindsight grievance fashioned in circumstances where delays in this period concerning finalising a proposed draft deed lay at the doorstep of Mr Vella. It was in Mr Vella's hands to resolve the issue sooner, as he ultimately did, accepting cl 3. It was Mr Vella's responsibility that the deed was not executed earlier.
142 The consequence was that the funds stayed in an ordinary trust account longer than everyone had anticipated. There was no negligence on the defendant's part in that respect.
143 There is a further point as regards any potential investment of the proceeds of the sale of the former matrimonial home. Claim 2 proceeds on the basis of Mr Vella's asserted beneficial entitlement to the entirety of the settlement funds. That assumption must be questioned. This issue was discussed in 2004 by reference to principles of survivorship as regards property held by joint tenants, in circumstances where Mr Vella was alleged to have killed his wife and was awaiting his trial on a pending wilful murder charge.
144 That raises a potential issue as to the application of the survivorship principle. This issue was canvassed by Kirby P in Troja v Troja (1994) 33 NSWLR 269 and by Professor John Tarrant in 'Unlawful Killing Of a Joint Tenant' (2008) 15 Australian Property Law Journal 224. As Tarrant points out, at a theoretical level Australian courts have taken a number of approaches to situations where one joint tenant kills another. In some cases, it has been held that the joint tenancy is severed at law and the felon-beneficiary becomes a tenant in common with no right to survivorship. In others, it has been held that they take full legal title, but subject to a constructive trust, whereby at equity they hold 'title … for [those] who, because of his or her criminal act, have a better claim to it': see, for example, Re Nicholson [2004] QSC 480 [10]. The overall effect of the rule was summarised by Jacobs JA (Wallace P & Mason JA agreeing) in Rasmanic v Jurewitsch [1970] 1 NSWR 650:
[T]he primary rule to be enforced is that the felon must not be allowed to retain any benefit flowing to him from the slaying and that he is required to hold any such benefit which flows at law upon trust for someone other than himself. This someone may be either the estate of the victim or the third joint tenant (652).
145 As to the evidentiary aspects of such cases, it has been held in a NSW case where an executor, as plaintiff, sought a declaration that the felon-beneficiary held on trust for the deceased estate, that the fact of the killing must be proved again on the civil standard: see Josifovski v Velevski [2013] NSWSC 1103 [20], citing Helton v Allen (1940) 63 CLR 691 and Troja v Troja (1994) 33 NSWLR 269. Helton dealt only with a jury verdict of acquittal, not conviction. In Troja there were open questions as to what the verdict of conviction actually signified, given the way the case was left to the jury. For Mr Vella, there was by all accounts a straightforward verdict of wilful murder, upheld subsequently by the Court of Appeal. In WA, according to Kennedy J in Mickelberg v Director of Perth Mint [1986] WAR 365, although it is a matter for the trial judge, a jury's finding of guilt beyond reasonable doubt is ordinarily to be accorded 'considerable weight' (385).
146 In March 2005 Mr Vella was convicted following his trial by jury. As regards the undivided half share in the property held by his wife, Ruth, prior to her death, there is a strong basis to conclude in the ascertained circumstances by his jury that Mr Vella could not take the benefit of the survivorship principle - as regards at least half the sale proceeds of the former matrimonial home. Consequently, Mr Vella would not be entitled to beneficially claim (as he does) interest in respect of at least 50% of the sale proceeds, on my assessment. For Mr Vella to further assert, as he apparently does, that he can advance a claim on behalf of other interests such as, for instance, his late wife's estate, is not a proposition I would accept.
147 Claim 2 must fail.
Claim 3: Failure to send a second letter to Mrs B concerning property
148 There are deficiencies which wholly undermine this last claim for damages as well. Again, albeit couched at par 7(iv) with the chapeau of 'fraudulent conduct' by the defendant, there is on the evidence not a hint of that. At best, there might be some claim of professional negligence with a claim to damages ventilated by reason of a failure to write a second letter to Mrs B in 2004.
149 However, there are fatal obstacles to even a claim for damages, not the least of which are:
(a) Mr Vella's foundational contention that missing items of property were, in fact, stolen by Mrs B is a serious and pejorative allegation which requires some viable proof. This contention has not been proved. In fact, by reference to what Mr Vella submitted in closing, this assertion presents as entirely speculative on his part and, on my assessment, approaches at the level of scandalous: see my earlier reference to Mr Vella's remarks in closing concerning the Police (ts 136).
(b) A number of items referred to in the letter of 21 June 2004 (see MJB47, exhibit 3, book of affidavits, page 156) would by their very character appear on the face of it to likely be the property of the late Ruth Vella, not Mr Vella. There is no basis to conclude that Mr Vella holds a lawful entitlement to this chattel property: see, for instance, reference to 15 bottles of perfume ($1,000); a pearl necklace ($800); gold earrings ($800); and a 'bracelet and necklace'.
Furthermore, given Mr Vella's March 2005 wilful murder conviction, his arguments that his wife's joint personal property would pass to him, cannot be accepted. In short, Mr Vella appears not to be the correct plaintiff to pursue a claim in respect of such items, if indeed, they are assumed to have been stolen.
(c) The causation problem I earlier addressed in the factual overview is fatal to Mr Vella. The obvious conclusion on the balance of probabilities must be that, even had a neutrally couched second letter been sent by the defendant to Mrs B, such letter would have had no effect in terms of prompting a delivery up to Mr Vella of $25,000 worth of chattels. That causation conclusion is reinforced by the fact that when Mr Vella's subsequent lawyers, Dawson Davies, did send a more forceful letter to Mrs B in 2006 (Mr Vella's murder trial by then being concluded with any inhibitions which had obviously concerned the defendant being well and truly overtaken) nevertheless, the letter was not answered. It produced no result.
(d) No proceedings were ever initiated by Mr Vella against Mrs B over this chattel property. The defendant added at par 71 of his witness statement, which formed part of exhibit 3 in the book of affidavits, that he would not have acted in such proceedings, his available time being dedicated to his criminal law practice, and particularly the defence of Mr Vella at a looming jury trial.
(e) My view is that the concerns expressed of a tactical nature by the defendant during June 2004, given the pendency of Mr Vella's murder trial, were entirely legitimate. They thoroughly justified him either not sending a second letter at all or, alternatively, sending only a neutrally couched letter. Even Mr Vella was forced to accept in closing that a neutrally couched letter is unlikely to have had any effect concerning Mrs B.
(f) Mr Vella's basic capital amount of $25,000 is, as he accepts, just an estimation (ts 145 - 147). Estimation does not approach a sufficient level of proof as to the proof of the value of the claimed items.
150 This negligence claim must also fail.
151 Mr Vella's action is therefore dismissed and judgment given for the defendant. I will hear the parties as to costs and other consequential orders.
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