All-new High Court to hear advocates’ immunity appeal

The plurality judgment in the last decision of the High Court squarely about the advocates’ immunity was written by Chief Justice Gleeson and Justices Gummow, Hayne and Heydon JJ.  They have now retired from the Court.  As have the other judges who constituted the Court in D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1, Justices McHugh, Kirby and Callinan.  Now, a Court constituted by a selection of the current justices (Chief Justice French and Justices Kiefel, Bell, Gageler, Keane, Nettle and Gordon) will hear an appeal from the New South Wales Court of Appeal’s decision in Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335 (trial judge’s decision here, and special leave application transcript here: the application was heard by Justices Bell, Gageler and Gordon, and the appellant’s counsel was R. D. Newell), and the appeal seems set to be heard in November.  Lawyers allegedly negligently settled litigation, were sued for damages, and successfully invoked advocates’ immunity.

I have been thinking about these questions for a long time and many times as a lawyer representing solicitors and barristers, called on the immunity successfully.  I published the concisely titled ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’ in 2002 at 10 Torts Law Journal 167 and would be happy to provide a copy upon request.  I was also in the High Court for argument of D’Orta-Ekenaike’s Case as one of the barrister respondent’s instructing solicitors.  I might even pop up to Canberra to watch the argument in this latest case.

It was third time lucky for a leave application in this kind of case, after the Court declined special leave in Young v Hones [2015] HCASL 73 (6 May 2015, Bell and Gageler JJ) and Nikolidis v Satouris [2015] HCASL 117 (4 August 2015, Nettle and Gordon JJ (‘Given the procedural history of those initial proceedings, including that the applicants agreed to settle those proceedings, the present case does not provide an appropriate vehicle for reconsidering [the immunity]’).

In the Court of Appeal, Chief Justice Bathurst, with whom Justices of Appeal Meagher and Ward agreed, reversed the decision of Harrison J.  The trial judge was quite frank: he said in a cri de cœur which met with little sympathy on appeal:

‘Notwithstanding all of the above, there remain at least two related matters that in my opinion are particularly troubling in this case, and which directly intersect with the way in which I am able to dispose of this application. The first matter is the apparent or potential strength of the plaintiffs’ allegations that the defendants have been negligent. As I have already commented, the plaintiffs would have been substantially better off if they had simply not defended the proceedings. The predicament that the judgment created for them is difficult to explain but even more difficult to understand. It is also difficult not to have a sense of unease about the possibility that an egregious error may go without the prospect of a remedy.’

Even if the immunity is not abolished, the decision has the potential to radically re-write the immunity landscape.  The other thing it will do is promote discussion of the immunity, see good people marshalling the increasingly excellent arguments in favour of its abolition, and provide the possibility (again) for legislative amendment or abolition.

What has happened since D’Orta-Ekenaike’s Case?  My (admittedly somewhat) Victorian-centric thinking suggests the following: Continue reading “All-new High Court to hear advocates’ immunity appeal”

Submissions on penalty in regulatory proceedings like ASIC and disciplinary prosecutions

The Federal Court has given a landmark decision about regulatory prosecutions.  In federal jurisdictions and state jurisdictions which follow the new decision, professional disciplinarians like ASIC and Legal Services Commissioners will no longer be able to enter into plea bargains in the expectation that the court or tribunal hearing them will rubber stamp the agreed outcomes so long as they are ‘within the permissible range’ of penalties.  But nor will disciplinary prosecutors be able to submit what the appropriate penalty ought to be.  Rather, they will be limited to making submissions about the appropriate sentencing principles, and about similar outcomes in similar cases.

The powerful judgment is at odds with a paragraph of dicta in a recent decision of the Victorian Court of Appeal in that it applies the High Court’s decision in Barbaro, a criminal case, to the quasi-criminal realm.  How the case plays out in Victoria remains to be worked out, but if this case goes to the High Court (and both sides have filed special leave applications), all that may change. Certainly the settlement of proceedings by regulators just got more complicated.

There seems to be a discrepancy about fundamental norms of government between the dicta of our Court of Appeal and the ratio of the Federal Court’s decision.  Once that gets resolved, however, each piece of legislation setting up the regulatory regime must be construed against the backdrop of those fundamental norms, and might give rise to different outcomes.  The Federal Court approached the task of working out how Barbaro applies in regulatory prosecutions in an orthodox fashion, i.e. by a process of statutory construction based on a close textual analysis of the legislative scheme as a whole.

The Chief Justice of the Federal Court allocated three judges to hear a preliminary question in the regulatory prosecution at first instance, in which the parties had already agreed on a proposed outcome, the result of a settlement (or, if you will, a plea bargain).  The proceeding was brought against the CFMEU and the judgment’s aim was apparently to sort out once and for all if, and how, the High Court’s decision in Barbaro is to apply in proceedings for a penalty.  The mouthful of a case is reported as Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, but seems set to be called ‘the CFMEU Case’.

It’s quite a judgment: indignant, keen to cut cant, and argued from first principles in relation to the place of the courts in civil society.  It is a further step in the demolition of the nonsense about disciplinary proceedings being sui generis, fundamentally distinct from criminal prosecutions, and (oh, spare me!) protective and not punitive in a way which means the protection of those against whom punishment is sought need not be extended.  The   punishment of citizens is, and must be seen to be, a job for the courts (except where parliament has expressly provided otherwise); where the State is seeking to punish citizens the label applied to the proceedings is a distraction; and in such cases, the Courts having been tasked with ascertaining the appropriate penalty, they must do so conscientiously themselves, however convenient it might be for them, for regulators, and for the regulated, to cede that task to a regulator which is part of the machinery of the executive arm of government, and to pay lip service to the inquiry conducted by the Court into the appropriateness of a deal done behind closed doors.  So said the Court.

The indignation extends to the many judges and other decision makers who have convinced themselves post-Barbaro that the decision does not apply  to them, often on the basis that criminal proceedings are special and proceedings for a penalty are civil proceedings and nothing like criminal prosecutions.  Distinguishing Barbaro away has been de jour. Continue reading “Submissions on penalty in regulatory proceedings like ASIC and disciplinary prosecutions”

Advocates’ immunity summarily defeats claim alleging negligent advice to settle

I once spent a long time writing an article called ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’ which was published in the Torts Law Journal when it was edited by Professor Luntz ((2002) 10 TLJ 167), and I acted for the Victorian Bar in relation to D’Orta-Ekenaike v Victoria Legal Aid and instructed in the hearing of that case in the High Court.  So a case like Stillman v Rushbourne [2014] NSWSC 730 is fairly well up my alley.  Three key areas of uncertainty about the scope of and operation of the immunity post-D’Orta have been:

1.  Whether advice to settle which results in settlement can be said to affect the conduct of the cause and so be within the immunity;

2. Whether the immunity extends to intentional wrongs; and

3. When it is appropriate to grant summary judgment by reference to the immunity.

Relatively recently, those issues have become relatively authoritatively resolved in favour of lawyers.  In Stillman, Davies J summarily dismissed a claim against solicitors that they negligently advised settlement and intentionally and wrongfully coerced the plaintiff into settling.  The various authorities on these questions are usefully rehearsed and consolidated by his Honour, making this judgment a useful one-stop shop on these issues.

In relation to allegations of intentional wrongdoing, see also Young v Hones (No.2) [2013] NSWSC 1429.  As to the desirability of dealing with an advocates’ immunity defence at an early stage, including in a summary judgment application, see also Donnellan v Woodland [2012] NSWCA 433, a decision of a bench of five.

Can’t keep up

Many new decisions of interest are coming out and I will not have time to blog them any time soon as I have to go to University and concentrate on my latest and hopefully last field of study, Shareholders Rights and Remedies.  Here are some pointers in case you want to read this slew of the new yourself.

Here is a landmark English case on illegally obtained evidence in civil proceedings: Imerman v Tchenguiz [2010] EWCA Civ 908, and CMS Cameron McKenna’s case note.  A husband in business with his wife’s brother separated from his wife.  Worried that he would hide assets from the wife, the brother copied information from the husband’s computer.  The English Court of Appeal refused to admit the evidence.  One of the little changes wrought by the Victorian Evidence Act, 2008 is to make clear that illegally obtained evidence may be inadmissible in civil proceedings as much as in criminal proceedings.

Then there is a mega-solicitor’s negligence decision from NSW’s District Court’s Judge Levy: Mills v Bale [2010] NSWDC 162.  It was a regretted settlement case of the kind I wrote about in ‘Compromise of litigation and lawyers’ liability’ (2002) 10 Torts Law Journal 267.  The client accepted a fraction of his claim on the basis of advice that the other side had ‘damning video evidence’ and that he might get nothing if he went to trial. The solicitor had no file note of the relevant conversation and no recollection of the alleged events. The client won more than $700,000, a rare victory since such cases do not often succeed. The judgment is 807 paragraphs long.  Analysis of the witnesses’ credit occupies 100 paragraphs.

Two from Victoria’s Court of Appeal:

  • First, Justice of Appeal Ashley with whom Acting Justice of Appeal Beach agreed, pronounced the latest chapter in the extraordinary saga of Shaw v Gadens Lawyers, another victory for professional negligence specialist Sam Tatarka.  It has not been published on Austlii, but was delivered on 3 August 2010. The Court confirmed that when VCAT determines civil disputes involving compensation claims, they do not entertain a cause of action created by the Legal Profession Act, 2004.  Rather, they are given a statutory grant to hear professional negligence cases according to common law principles.  Let me know if you want a copy.
  • Secondly, the latest in the saga of Byrne v Marles (see this earlier post about the earlier decision which threw the Legal Services Commissioner’s office into chaos): Byrne v Legal Services Commissioner [2010] VSCA 162.  Mr Byrne successfully sought judicial review of the Commissioner’s decision to characterise a complainant’s complaint as a disciplinary complaint.  The Appealohs held that there was a breach of natural justice in failing to provide an opportunity for the solicitor to be heard on that question.  The Commissioner appears then to have written to every complainant and given them an opportunity to make submissions.  Mr Byrne made submissions, and the Commissioner, unmoved, came to the same decision.  He sought judicial review of that, and that is what this decision is about.  He failed, but along the way, had the former Commissioner re-spanked.  The former Commissioner’s reasons for reaffirming her original classification, absolutely typical of the reasons I have seen her give in a template-like manner, over and over, were described by Justice of Appeal Ashley at [96] as ‘too smart by half. They invited further proceedings’.  In fact, his Honour found at [63] that they were not reasons at all; they were just a statement of the conclusion which the reasons should have supported.

Another decision of the utmost importance to this blog, which again passed me by, is the decision of New Zealand’s Supreme Court (equivalent to our High Court) in Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1; [2008] NZSC 55.  More to come, needless to say.  Meanwhile, You will appreciate my interest in the case when you consider that the Chief Justice opined that disciplinary proceedings making serious allegations should be proved on the criminal standard of proof (remember what Justice Finkelstein said about disciplinary proceedings?), as opposed to the civil burden as explained in Briginshaw v Briginshaw.  Paragraph no. 1 of the Chief Justice’s reasons said: Continue reading “Can’t keep up”

Part-payment cheques in full and final settlement of debts

Update, 26 February 2011: For a case about a dispute over a $50 million bill allegedly settled upon banking of a $20m cheque, see J P Morgan Australia Ltd v Consolidated Minerals Pty Ltd [2011] NSWCA 3.

Updates, 3 August 2010: For an application of these principles in the context of an offer of compromise made in a dispute about party party costs, see Amos v Monsour Pty Ltd (formerly Monsour Legal Costs Pty Ltd) [2010] FCA 741.  For a Victorian authority of high pedigree on the subject, see the old decision of the in F T Jeffrey Pty Ltd.v. Evington Holdings Pty Ltd, unreported, Full Court of the Supreme Court of Victoria, 24 November 1977 (Young CJ, Lush and Fullagar JJ), a decision favoured by Richard Manly SC who brought it to my attention.

Original post: I have never really known what to do when a cheque in part-payment of a debt is received under cover of a letter which says that if the recipient banks it, it will be taken to be in full and final settlement of the debt.  Had I been asked urgently to advise, I would probably have said the client should bank it and sue for the difference.  The issue arose recently in JP Morgan Australia Limited v Consolidated Minerals Limited [2010] NSWSC 100 where the debt was for $50 million and the cheque for $20 million.  Justice Hammerschlag said the law is — it all depends: Continue reading “Part-payment cheques in full and final settlement of debts”

Without prejudice privilege and the Evidence Act, 2008

Update, 9 August 2010: See also Forsyth v Sinclair (No 2) [2010] VSCA 195 where Justices of Appeal Neave and Redlich and Acting Justice of Appeal Habersberger held that the Evidence Act, 2008‘s ‘relevant to costs’ exception to the s. 131 rule that without prejudice communications are inadmissible is trumped by the Supreme Court Act, 1986 provision that anything said or done at a Court-ordered mediation may not be adduced in evidence.  So, one party’s counsel said to another at the mediation that the very costs consequences which the Court ended up making would flow if the other party did not accept an offer.  That was relevant to the question of costs, but it was inadmissible because of s. 24A of the Supreme Court Act, 1986.

Original post: In Alexander v Australian Community Pharmacy Authority (No 2) [2010] FCA 467, a judge of the Federal Court in Melbourne admitted a ‘without prejudice’ letter (which was not expressed to be ‘without prejudice except as to costs’) into evidence at a post-trial costs hearing.  His Honour noted that the parties paid no attention in argument to the Evidence Act, 2005 (Cth) which governed the issue, and that communications which otherwise attract negotiation privilege are admissible if they are relevant to costs.  Victorian lawyers are obviously going to have to get used to the new regime, because the Evidence Act, 2008 (Vic.) is to the same effect.  Based on this decision in relation to legal professional privilege (now called ‘client legal privilege’ at least in those circumstances where the Evidence Act, 2008 applies), it is likely that the new regime will apply to the adduction even of letters written prior to the commencement of the new Act.  Treat every without prejudice letter as a Calderbank letter, in other words. Continue reading “Without prejudice privilege and the Evidence Act, 2008”

Settlements unapportioned between costs and damages

Morris v Riverwild Management Pty Ltd [2009] VSC 439 is a decision of Justice Pagone in an unusual dispute.  A developer built some apartments at Falls Creek.  Something obviously went wrong, because he and one of the purchasers of an apartment sued the architect, the builder, the structural engineer and his company, the supervising engineer and his company, and the building supervisor.  The claimants entered into the following settlements with the defendants at around the same time:

  • Architect: $1.4 million plus the claimants’ costs to be taxed on the Supreme Court scale (28%)
  • Certifying engineer: $1.5 million inclusive of costs (30%)
  • Builder: $175,000 all-in (3.5%)
  • Building surveyor: $1.85 million inclusive of interest and costs (37%)
  • Structural engineer: $79,000 inclusive of interest and costs (1.6%).

The claimants got a smidge over $5 million.  The percentage borne by each respondent is shown above in brackets.  The architect no doubt got a shock when the plaintiffs served a bill of costs for $2 million, including the costs of pursuing the other defendants.  ‘I don’t think so!’ he objected, and Justice Pagone agreed (though a litigation estoppel based on facts I have not included meant that this was a Pyrrhic victory).  The architect said if the claimants got all of their costs from him, they would get a part of their costs twice: first from him, and second from the other respondents who had paid settlements which included the costs of the claim against them.  The part of the costs they would get twice was the costs which were not referable exclusively to the claim against the architect. Continue reading “Settlements unapportioned between costs and damages”

House of Lords restates law of negotiation (or ‘without prejudice’) privilege

I reckon Dr Desiatnik is unlucky with the timing of his texts.  The first edition of Legal Professional Privilege in Australia was finished when the High Court changed the test for the privilege from a sole purpose to dominant purpose and restated the law of implied waiver.  I have always shuddered about the story one of my law lecturers recounted of a Canadian academic who devoted a decade to a text on death taxes only to see the parliament abolish them on the eve of the launch.  I hope the story is apocryphal.  This time around, Dr Desiatnik — a lovely man with a quirkily old fashioned text writing style — has finished a whole book devoted to negotiation privilege, which is about to be published, and the House of Lords has come along and put out a major judgment on the subject.  Fortunately, Ofolue v Bossert [2009] UKHL 16 does not seem to revolutionise the law. Here is The Times‘s account of the decision.

On splitting liability and quantum

In this post, I reproduce an extract from Justice Hoeben’s recent decision in Johnson v Trustees of the Roman Catholic Church [2009] NSWSC 309 which discusses the increasing willingness of courts (in NSW at least) to determine preliminary issues before the main trial. In this case, everything except for quantum was ordered to be determined in a first trial, with a second trial on quantum only if necessitated by the outcome of the first trial. It was a kind of professional negligence case in a sense: a pupil was suing her school for her teacher’s negligence while she was on school camp.

The only reform of civil justice I seem to hear about these days is an increasing emphasis on mediation. Well, that’s an exaggeration, since Victoria is about to join the uniform evidence legislation jurisdictions, and its Attorney-General proposes to unify the rules for all the courts (excellent idea), but I will put aside these promising developments for a moment. I suggest that rather than increasing the amount of mediation, civil justice reform should concentrate on increasing the level of judicial adjudication, which does not necessarily mean increasing the number of once and for all oral trials of all issues.  What there should be more mediation of is not the final outcome of cases, but the things which litigants at the moment typically go to court for: interlocutory battles.  Far better to outsource the adjudication of disputes about discovery and the parties’ articulation of their respective cases so that the trial is prepared quickly than to outsource the resolution of complaints. Continue reading “On splitting liability and quantum”

The construction of the full common law release

Litigation was settled for several million dollars. The release said

‘5. The plaintiffs hereby release the defendants from all claims, actions, suits, demands arising from or in any way connected with the Proceedings, the allegations contained in the Statement of Claim and of the liquidation of the third plaintiff.’

That’s the kind of release you can get when you’re willing to pay several mil for it. But what does it mean? ‘Don’t even think of bugging me ever again, in relation to anything that happened in the past, whether you’re aware of it or not’ or something more confined?  It is a question which crops up relatively often in practice, but the law on the subject has always seemed pretty obscure.  When several mil’s on the table people jump into these kinds of releases. Sometimes, they come to regret it. Justice Einstein explained the principles, in Shepherds Producers Co-operative Limited v Lamont [2009] NSWSC 294, commencing with the handy summary of the principles applicable to the construction of releases reproduced below. Continue reading “The construction of the full common law release”