Justice Hollingworth unpicks the proportionate liability provisions

In Woods v De Gabriele [2007] VSC 177, Justice Hollingworth has tentatively unpicked some difficult parts of the federal and Victorian proportionate liability provisions in Part IVAA of the Wrongs Act, 1958 (the relevant provisions are here), and in the Corporations Act, 2001 (Cth) and Australian Securities and Investments Act, 2001 (Cth) Division 2, Subdivision GA. Her Honour held that the rule requiring leave of the Court before commencing proceedings against insolvent companies was no barrier to joining an insolvent concurrent wrongdoer under the Wrongs Act, 1958, and suggested the possibility that:

  • if a claim is apportionable (for example because it could have been pleaded as a common and garden variety misleading or deceptive conduct claim under the Fair Trading Act, 1999), it may remain apportionable even if the plaintiff pursues some other cause of action in an attempt to avoid the proportionate liability regime;
  • in the case of alternative causes of action pleaded in support of a claim for compensation for the same loss and damage, some apportionable and some not, all of the claims ought to be bundled up for the purposes of apportionment of that loss and damage, and treated as one apportionable claim; and
  • it is appropriate, on a defendant’s application, to join an alleged concurrent wrongdoer as a defendant rather than a third party even if the plaintiff opposes the joinder. Continue reading “Justice Hollingworth unpicks the proportionate liability provisions”

Solicitors’ settlement advice immune from suit

I know for a fact that the profession does not understand the extent of the advocates’ immunity which is set out in the decision of the majority in D’Orta-Ekenaike v Victoria Legal Aid [2005] 223 CLR 1. Not uncommonly I see lawyers’ negligence claims arising out of litigation being defended without claiming the immunity, or wasting costs by failing to claim it at the outset. In Jezovita v AGL [2007] VCAT 1447, VCAT’s Senior Member Howell, undoubtedly the most experienced examiner of immunity defences in the world, has delivered a pithy judgment which reiterates two matters in a clear way, and states clearly something which is relatively newly brought out into the open, though it has been lurking around quietly if you looked hard enough. The two matters reiterated are:

  • in relation to out-of-court litigation work, solicitors are as entitled to the immunity as barristers, regardless of whether they are appearing as advocates or engaging in the solicitor’s traditional role; and
  • advice as to settlement of litigation, as well as failures to advise in relation to settlement issues, may not be sued on because of the immunity: Biggar v McLeod [1978] 2 NZLR 9; Kelley v Corston [1997] 4 All ER 466.

In this matter, both solicitors and barrister were entitled to summary disposition of Mr Jezovita’s claim against them that they pressured him into the settlement, should have realised he did not understand the terms of settlement, that they negotiated negligently and did not get a satisfactory result, and that they should have advised him to run his case. In other words, just another failed regretted settlement case.

The relatively new matter clearly expressed in this judgment is that adding an allegation of undue influence into the plaintiff’s case will not assist, because the equitable doctrine of undue influence either founds a defence to a claim based on a transaction said to have been induced by undue influence of the counterparty or founds a claim to set aside a disposition said to have been brought about by the exercise of undue influence on the part of the counterparty to the disposition, but does not lead to an entitlement to damages: D’Orta-Ekenaike v Victoria Legal Aid (per Buchanan JA in the reasons for decision of the Court of Appeal’s refusal to grant leave to appeal from Judge Wodak’s decision at first instance, approved by Justice Callinan on appeal at (2005) 223 CLR 1 at 121).

Doctor’s opinion not given in trade or commerce so VCAT had no jurisdiction

In a landmark decision with profound implications for VCAT’s Fair Trading Act, 1958 jurisdiction over lawyer-client disputes about professional negligence and fees, a Deputy President of VCAT has recognised that it did not have jurisdiction to hear a former client’s misleading and deceptive conduct claim brought against ‘a professional’ in the traditional sense of the word, in relation to professional advice. The claim was brought under s. 9 of the Fair Trading Act, 1958 (the state analogue of s. 52 of the Trade Practices Act, 1974), which says:

“(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.

The case is Stagliano v Duke [2007] VCAT 1070. The applicant was injured at work, and made a Workcover claim. His employer’s Workcover insurers had him examined. The doctor wrote a report and sent it to the insurer. That professional opinion was not given in trade or commerce, even though it was given pursuant to a contract with the insurer, and for a fee, Deputy President Steel held, for the following reasons: Continue reading “Doctor’s opinion not given in trade or commerce so VCAT had no jurisdiction”

Summary dismissal in a solicitors’ negligence claim at VCAT

Skinner’s Case [2007] VCAT 917, a claim against a leading labour law firm, was for some reason heard in VCAT’s Civil List. A more likely list would have been the Legal Practice List, given that it was a professional negligence claim, albeit one pleaded under the Fair Trading Act, 1999 and the Trade Practices Act, 1974. But Mr Skinner, a self-represented litigant with an enthusiasm for internet research and a copy of Pizer’s Annotated VCAT Act under his arm, came up against the Acting President, Judge Bowman, who turfed his $400,000+ claim out as doomed to fail and as an abuse of process. Yet another failed regretted settlement claim bites the dust. The only pity is that this proceeding was allowed to wallow for 2 years, while repeated directions of the Tribunal requiring witness statements and an intelligible statement of claims against the solicitors were ignored. The solicitors did not claim advocates’ immunity in respect of the suit, despite the availability of such a plea: Biggar v McLeod [1978] 2 NZLR 9; O’Connor-Sraj v Lawrence [2005] VCC 1093. Continue reading “Summary dismissal in a solicitors’ negligence claim at VCAT”

WA Supreme Court says advocates’ immunity applies to misleading and deceptive conduct claims against lawyers

In Alpine Holdings Ltd v Feinauer[2007] WASC 58, the Supreme Court of Western Australia gave very short shrift indeed to an argument that a statutory claim of misleading and deceptive conduct was not met by advocates’ immunity. The decision is interesting for this reason alone. It is also interesting because of:

High Court speaks on accrual of cause of action for negligence in pure economic loss case

On Friday, the High Court published a near unanimous judgment in Commonwealth of Australia v Cornwell [2007] HCA 16 on the accrual of a cause of action for negligence in which pure economic loss was claimed. I am yet to read the judgment properly, however it is apparent that a cause of action in negligence was found to have accrued decades after the parallel contractual cause of action, which was complete upon breach of a duty of care owed by the Commonwealth to the plaintiff in 1965. Callinan J dissented, saying the cause of action was well and truly statute barred. Neither of the decisions discussed in recent posts, in which a defendant-friendly approach was taken, Winnote v Page, or Jessup v Wetherell, are considered in the decision.

How a case half in and half out of the limitation period is dealt with

The approach of VCAT’s Legal Practice List to a nice limitations point is illustrated by Wells’s Case, [2006] VCAT 2370 (Senior Member Howell, 16 November 2006), also the subject of this post. What must have been a professional negligence action was commenced just 4 days before the 6th anniversary of the Legal Practitioner ceasing to act for the Client. The limitation period was such that only actions arising in the 6 years before the claim would be within time. The Client said the Legal Practitioner negligently failed to do various things. VCAT decided that only the Legal Practitioner’s conduct during the 4 days during the retainer but within the 6 years before the claim could be enquired into. Continue reading “How a case half in and half out of the limitation period is dealt with”

Mega firm escapes liability for clear negligence in limitations decision

Winnote Pty Ltd v Page [2006] NSWCA 287 is not only a case about digging up peat for profit but a learned essay on the application of that simple little rule that you can’t sue your lawyer more than 6 years after your cause of action against him accrued. Victorian soils yield difficult legal questions: Perre v Apand [1999] HCA 36, a 70,000 word exegisis devoted to making the law of tortious damages for pure economic loss even less clear than before, was a case about digging up potatoes for profit. The decision is a crystal clear illustration of two principles: (i) a limitation period for a professional negligence claim may expire before the client is aware of either of the negligence or the loss; and (ii) the limitation period commences when some non-negligible loss is first suffered, even if the main loss is suffered a lot later. It also makes clear that in negligent advice cases (or negligent failures to advise cases) once the negligence has occurred, there is no ongoing duty to give the correct advice during the course of the remainder of the retainer, and the courts will conduct their analysis by reference to the substance of the matter, not by reference to the ever-so-clever pleadings of sophisticated plaintiffs. Continue reading “Mega firm escapes liability for clear negligence in limitations decision”

Unrepresented woman ordered to pay costs of statute barred case

Wells’s Case [2006] VCAT 2370 (Senior Member Howell, 16 November 2006)

Mrs Wells’s case, also the subject of the previous post, was struck out under s. 75 of the VCAT Act, 1998 for having been brought out of time. Mr Howell found that the case was “lacking in substance” because it was statute barred and ordered her to pay the Legal Practitioner’s costs despite accepting that she genuinely believed that she could bring the claim more than 6 years afer the allegedly negligent omissions, which some might say was not a particularly severe misconception if she was suing in negligence, where the first occurrence of some damage marks the accrual of the cause of action, rather than the date of the allegedly negligent act or omission. Sections 75(1) & (2) of the VCAT Act, 1998 provide: Continue reading “Unrepresented woman ordered to pay costs of statute barred case”

Res judicata: VCAT strikes out case previously decided by Legal Profession Tribunal

Wells’s Case [2006] VCAT 2370 (Senior Member Howell, 16 November 2006)

I have always thought I was the only person in the world who held the view that an unsuccessful claimant in the Legal Profession Tribunal was not allowed, despite s. 133(2) of the Legal Practice Act, 1996 to have a second go in the courts, even though a successful claimant was allowed to do so. I probably wasn’t, since that’s what Senior Member Howell (formerly the Tribunal’s Registrar) decided in VCAT the other day, and he has probably always thought the same way. Continue reading “Res judicata: VCAT strikes out case previously decided by Legal Profession Tribunal”

New Zealand ditches advocates’ immunity; Scotland confirms it

It took New Zealand’s new ultimate appellate court a long time to hear Chamberlains v Lai [2006] NZSC 70 and make a decision, but after a long think, its judges have decided to give advocates’ immunity the boot. Advocates’ immunity, otherwise sometimes known as “barristers’ immunity” or “forensic immunity”, applies equally to solicitors involved in litigation as to barristers involved in litigation. It is an immunity from being sued for negligence or anything else for work in court or work intimately connected with such work in court, and is based on the public policy that the umpire’s decision is final.

Many will be the analyses of how Australia is alone in the civilised world in retaining the immunity (though they will be wrong, because Scotland recently followed Australia’s lead and thumbed their noses at the House of Lords: see below). But what needs to be analysed is whether as a practical matter, clients can successfully sue barristers in any particular place, whatever the name of the impediment to doing so is. A right to sue which gives rise to an unsuccessful suit is a right to make a very poor investment of a lot of legal fees. The law in places which profess not to recognise the immunity is less different than we might imagine from the law in places which do profess to do so. The more I know about the law, the more interested I am in analyses of facts against results, ignoring the legal language interposed between them.

Meanwhile, the Inner House of Scotland’s Court of Session declined an invitation to abolish the immunity in criminal cases in Wright v Paton Farrell [2006] SLT 269, showing uncharacteristic restraint in this curious corner of jurisprudence by not commenting on civil cases.

Justice Gillard says: prosecute the same offence as many times as you like

Update: This decision was reversed on appeal: Kabourakis v Medical Practitioners Board of Victoria [2006] VSCA 301.

Kabourakis v Medical Practitioners Board of Victoria [2005] VSC 493 (Gillard J)

Justice Gillard said doctors get no res judicata and allowed the doctors’ regulator to fix a bungled prosecution following a complaint by deciding to investigate the matter already decided under its power to investigate of its own volition. Continue reading “Justice Gillard says: prosecute the same offence as many times as you like”

Barrister leaves claiming the immunity too late to get costs when he wins

Zunica’s Case [2006] VCAT 110

A barrister succeeded on an immunity defence and sought costs upon receiving the reasons. The applicant sought recognition of the fact that a costs dispute survived the immunity decision. Mr Butcher said [7]:

“The jurisdiction of the Tribunal to hear and determine a dispute is based upon the dispute as it is originated and described to the relevant RPA, in this case the Victorian Bar.”

Although the Victorian Bar had described the matter as a costs dispute and a pecuniary loss dispute in the critical notice under s. 128 of the old Act to the effect that it could not settle the problems, allowing the parties to refer the matter to the Tribunal should one of them wish to do so, he found that properly construed, the documents which had led the Victorian Bar to describe the matter as in part a costs dispute were found in fact to constitute purely a pecuniary loss dispute. And that was despite the fact that the box on the form used to lodge costs and pecuniary loss dispute resolution requests next to the statement “I think the legal practitioner handled the matter badly and I don’t want to pay for this” was ticked. It was so because the covering letter under which the form had been lodged, drafted by a solicitor, “formally claim[ed] pecuniary loss”, and there was no evidence that the discretion to exercise the 6 month time limit for the lodgment of costs disputes had been exercised by the Victorian Bar.

The costs application failed because the whole dispute resolution process took almost 18 months, but the respondent barrister did not assert the immunity as a defence until a week before the hearing. He asserted that:

“it was not proper for a claim for immunity to have been brought [during the attempts at dispute resolution by the Victorian Bar] on the basis that the dispute is misconceived or lacking in substance” [26].

Mr Butcher agreed with that submission, though later he said more equivocally:

“Even if the matter were to be allowed to go through the process of the Bar Ethics Committee before claiming the immunity…”.

It is not at all clear why a barrister ought not claim the immunity during the process of the Bar Ethics Committee. What that Committee was charged with doing, under s. 128 of the Legal Practice Act, 1996 was to attempt to settle the dispute. A dispute with a man who is immune from the dispute and relies on it must be easier to settle than a dispute with a man who does not.

The proposition that:

“It is no answer to say that the applicant client should have known of the immunity; what is relevant is when and how it is notified by the legal practitioner claiming that immunity”

is superficially unattractive since the test for the award of costs against an applicant is whether the dispute was misconceived, but the reasoning is in fact correct, because the immunity is a defence and the dispute is not misconceived until such time as the respondent advises he wishes to avail himself of the defence.

Ed Richards was for the applicant, Peter Cawthorn for the respondent, a barrister.

Barrister claims immunity too late to get costs; regretted settlement suit fails

Phua’s Case (solicitors) [2005] VCAT 2919 Costs dispute; s. 86 discount; regretted settlement

Phua’s Case (barrister) [2005] VCAT 2918 Costs of hearing; immunity

Mrs Phua was alleged to have stolen from her employer. Mr Phua admitted complicitly and made restitution. The employer commenced Magistrates’ Court proceedings. The Phuas defended and counterclaimed for wages and travelling expenses. Then they retained the solicitors in February, briefing them with tape recordings of a police interview. Mrs Phua was subsequently charged and convicted in October, but the solicitors did not act in those proceedings which resulted in a bond and an order to make restitution of a further $7,500 or so. It seems the solicitors acted in the counterclaim, the civil proceedings having been perhaps overtaken by the restitution order in the criminal proceedings. It settled on the afternoon of the first day’s hearing, 11 months into the retainer (quaere the date in [5] is wrong).

The solicitor’s estimate of future costs under s. 86 of the Legal Practice Act, 1996 was $3,500 for costs and disbursements. In fact they charged $1,100 more than that. They had charged twice for one letter, and the duplication was disallowed.

Phua’s claim was that he settled “only because counsel for the emplolyer insisted that provision of [certain pieces of documentary evidence] at such a late stage would cause the hearing to enter a second day, with the consequential increase in legal costs”. The claim for compensation was dismissed on the basis that the evidence other than that which was not discovered until the day of the trial could not have been completed on that day anyway.

Mr Howell referred to the understimate by $1,100 as “a signifcant amount” but did nothing about it. He characterised the breach as one of failing to advise changes to the original estimate promptly, and noted that before the trial, Phua knew what the costs would be. Though it was “rather late for [the solicitors] to be asking for counsel’s fees and thus, in substance, to be changing the estimate” he was not satisfied “that the delay in changing the estimate was of a sufficient degree of seriousness to warrant the reduction of the accounts”. So Phua was awarded the grand sum of $19.60. The barrister who was also sued was immune from suit because advice as to settlement during a trial is immune: Biggar v McLeod; Kelley v Corston. He did not get costs “but only because” he did not claim the immunity prior to the hearing.

The parties were unrepresented. Alan Hebb was for the Tribunal.