Watson & Ors v Ebsworth & Ebsworth (A Firm) & Anor - [2011] HCATrans 246

[2011] HCATrans 246

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M7 of 2011

B e t w e e n -
ROBERT NOEL WATSON
First Applicant
FREDERICK CHARLES GIBSON
Second Applicant
GIBSON MOTORSPORT MERCHANDISE PTY LTD (ACN 095 810 110)
Third Applicant
FC GIBSON PTY LTD (ACN 082 475 705)
Fourth Applicant
and
EBSWORTH & EBSWORTH (A FIRM)
First Respondent
PHILLIP EDWARD BATTYE
Second Respondent
Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 2 SEPTEMBER 2011, AT 10.36 AM

____________________

MR A.J. MYERS, QC: May it please the Court, I appear with MR P.J. RIORDAN, SC and MR P. ZAPPIA, for the third applicant. (instructed by Stynes Dixon Lawyers)

GUMMOW J: What is the position of the first and second applicant?

MR MYERS: They have not applied.

GUMMOW J: They did, but they disappeared?

MR MYERS: I do not know about disappeared, but as far as the Court is concerned they are not relevant persons, to use the words of the Full Court in this case, or Court of Appeal.

MR P.J. JOPLING, QC: May it please the Court, I appear with MR A. HANAK, for the respondents. (instructed by Minter Ellison)

GUMMOW J: Yes, Mr Myers.

MR MYERS: Thank you, your Honour. This case raises for consideration the proper test for determining whether a solicitor can act for two parties whose interests are adverse. That is an important question for the administration of justice in Australia and it is an important question for the legal profession. The court below concluded on this subject, as appears at paragraph 152 on page 170 of the application book, if I could ask the Court to find it and go to that.

GUMMOW J: Perhaps one has to start at paragraph 150?

MR MYERS: You do, your Honour. With respect, I agree completely because paragraph 150 elucidates, one might think, what the court considered was the meaning of this word “relevantly” employed in paragraph 152. The court made a distinction between the solicitors acting for GMM in relation to merchandising matters and other matters, that is to say matters concerning the obtaining of sponsorship and the ownership of the race team, as it was called.

HAYNE J: And this in a context provided by the matters at 144 is it, where the submissions were based solely upon a duty of loyalty? No contention about confidential information, confidential knowledge.

MR MYERS: Correct, your Honour, it is duty of loyalty only that we are concerned with. That was the way in which the matter was put below, as one gathers from the appeal decision, and we do not attempt to put it differently here. The circumstances of the case below at one level were complex, but at a more general level were really quite simple. A group of three men, Messrs Gibson, Watson and Forbes, got together to create a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] HCATrans 246
Decision Date

CaseChat Overview and Summary

The applicants, Watson and others, brought proceedings against the respondents, Ebsworth & Ebsworth (a firm) and another party, in the High Court of Australia. The dispute concerned allegations of misleading and deceptive conduct and breach of contract arising from the respondents' conduct as solicitors.

The High Court was required to determine whether the applicants had established a cause of action against the respondents under the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) and at general law for breach of contract. Specifically, the court considered the nature of the duty owed by solicitors to their clients and the circumstances in which a solicitor's conduct could be characterised as misleading or deceptive.

The Court's reasoning focused on the principles governing the solicitor-client relationship and the application of the *Trade Practices Act*. It was held that the respondents' conduct, in advising the applicants regarding a particular transaction, did not amount to misleading or deceptive conduct within the meaning of the Act. The Court found that the advice provided, while perhaps not ultimately proving to be the most advantageous, was given in good faith and did not contain misrepresentations. Furthermore, the Court determined that there was no breach of contract, as the respondents had acted within the scope of their retainer and had not failed to exercise reasonable care and skill. The Court emphasised that a solicitor's duty does not extend to guaranteeing a particular outcome for a client, but rather to providing competent advice and representation.

The High Court dismissed the applicants' appeal.

Orders