Cameron & Anor v Bell S5/1994 [1994] HCATrans 122 (18 November 1994)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S5 of 1994

B e t w e e n -

ALEXANDER MacDONALD CAMERON and LINDA MAREE CAMERON

Applicant

and

IAN ROBERT BELL

Respondent

Application for special leave

to appeal

MASON CJ

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 18 NOVEMBER 1994, AT 11.01 AM

Copyright in the High Court of Australia

MR M.J. SLATTERY, QC: May it please Your Honours, I appear for the applicant with my learned friend, MR P.W. LARKIN. (instructed by Cole & Butler)

MR W.H. NICHOLAS, QC: If Your Honours please, I appear with my learned friend, MR I.F. BUTCHER. (instructed by Colin Biggers & Paisley)

MASON CJ: Mr Slattery.

MR SLATTERY: Your Honours, this application invites the Court to examine the more detailed definition of the objective standard of care for the purposes of a particular category of case, namely, one arising out of a particular relation of proximity, that of the common situation where a solicitor acts for more than one party in a conveyancing transaction. In this case, the findings of both the trial judge and the Court of Appeal make this a particularly apt vehicle to consider that standard of care.

The point at issue may be shortly stated. It is this: is the relationship of proximity of a solicitor and client when acting for more than one party one of special danger for the solicitor in the discharge of the solicitor's duties so as to ordinarily require the taking of particular procedural steps to discharge that standard of care? The applicants contend that this is a category of case, indeed, involving special dangers. They contended that before the trial judge and in the Court of Appeal.

GAUDRON J: You have to say, do you, that the duty is different to the client if acting for both parties than if acting for one? How can that be? I mean, your duty is to the client in relation to his or her needs.

MR SLATTERY: It is a duty to do something which is qualitatively different. It is a duty which has this common element to it, that is, it is to overcome the natural tendency to promote consensus which applies when a solicitor is acting for more than one party, that is, to promote a consensus of interest rather than look to the separate interests of each separate client.

GAUDRON J: That is just to say that in respect of each party the solicitor's duty is exactly the same as if he were acting for only the one.

McHUGH J: It cannot have anything to do with duty. It just may mean that the factual circumstances that generate the duty are different and where the duty has got to operate different.

MR SLATTERY: We concede this, Your Honours, that - - -

McHUGH J: Do not concede that, it is only a question of fact. There is no special leave case.

MR SLATTERY: We concede this much, Your Honour, that it does involve an examination of the content of a duty in a particular category of case but what we submit is that that has been done in cases such as Cook v Cook and, indeed, examined to some extent in Burnie Port Authority, that what the Court has done, it has said where a particular category of case throws up a situation of special control on the part of one party, special vulnerability on the part of another party, one can get as the content of the relevant duty of care in that category of case, one can get a situation where the duty is non-delegable which, in effect, involves requirement that procedural steps be taken to ensure that care is taken of the invitee or the patient or whoever fits into the particular category of case.

So, we say to admit, as we do, that we are looking at the quality of conduct in a particular category of case is not necessarily to take it out of special leave territory, if I can put it that way.

McHUGH J: You are using a lot of what I call neon concepts. It is just all meaningless. It is all abstract. There is only one standard of care and it is the duty to take reasonable care and it has to be applied in various circumstances. It is hardly a different standard of care or a different duty, depending upon whether you are acting for one or both. If the facts are the same in both cases so far as they affect the client, then it is the same standard of care required. If the facts are different, you may have get a different application. Then it may be, in a particular case, a higher standard is owed to a single client than if you are acting for both of them; depends on the facts of the case.

MR SLATTERY: It does, Your Honour, but what we are saying is that this Court has, from time to time, categorised certain relationships as involving special dangers and therefore heightened duties.

McHUGH J: Supposing you had to instruct a jury in this case. How would you instruct a jury in this case as compared to a case where the solicitor was acting for only one client or one party to the transaction?

MR SLATTERY: In terms of the statement of principle of Mr Justice Kirby, the learned President of the Court of Appeal in Cousins v Cousins which we have set out on page 4 of our written submission. Indeed, what we are really contending in this case - it is set out in full there so Your Honours do not need to go to the actual authority.

McHUGH J: That would not help a jury too much, would it?

MR SLATTERY: It would not be in precisely that text but it would extract at least these elements, Your Honour, that, one, that there should be:

independent and separate advice assiduously attended to the interests of the several parties -

that that should overcome danger of giving less than full attention to the separate rights of each, and it is a situation, a category of case, where particularly high standards of care need to be observed. That is the kernel of what emerges from that passage of His Honour's judgment.

MASON CJ: But what do you mean, a high standard of care? Why is the standard, the reasonable standard, higher in this case than it is in any other?

MR SLATTERY: Because of a fact which has been recognised by so many judges this century, a summary of which is included at the back of the written outline of argument, and most recently in Fox v Evergingham, that this situation is one where it is virtually impossible, putting those statements at their highest, for a solicitor to discharge his or her duties to each of the several clients for whom the solicitor acts.

MASON CJ: But are you suggesting it is more than a reasonable standard of care, having regard to the circumstances?

MR SLATTERY: No, Your Honour.

MASON CJ: Well, I do not understand why you are using the word "higher" standard.

MR SLATTERY: It is used in the same sense as it is used, say, in Burnie Port Authority where there are some categories of case where the situation presented by a relationship or a situation of control or vulnerability is such that the content of the duty changes to ensure that, in that particular case, care is taken by subcontractors and the like. Here, we say, yes - we cannot say other, we submit, than Clayton v Hawkins, that the standard is one to take reasonable care but we say that it is a special category of case where the content of the duty, in effect, needs special definition because of the warning which have been given by judges over this century of the special dangers which are involved.

GAUDRON J: Does it come down to this, looking at it from the other point of view: you are entitled to better and more detailed advice because you have one solicitor acting for both parties than if you had one solicitor acting for one party alone?

MR SLATTERY: With respect, Your Honour, it really comes down, we submit, to this, that you are entitled, in the ordinary case, to the taking of special procedural steps to achieve that standard of reasonable care. In this category of case you are normally entitled to special procedural steps to be - - -

GAUDRON J: You have to go to the point of this case of different advice, do you not, not just procedural steps? It is not a question of parties being in different rooms at different times or that sort of thing, you have to go to the point of different advice.

MR SLATTERY: We submit, with respect, one does not have to go that far and we have isolated the particular finding that, in effect, says that once we get a duty to following the procedural steps in the way that we contend, we say that there are already findings made by the trial judge which shows that that has been breached. A particular finding for convenience, Your Honour, is set out on page 5 of the written outline, which is, at the top of the page:

it would have been best if Mr Bell had had a separate conference with Mr and Mrs Cameron, in which he checked carefully their arrangements for finance and having found that they were less than secure, gave pointed evidence as to the consequences of being unable to complete.

GAUDRON J: That is....., but you do have to go to the advice in this case, do you not?

MR SLATTERY: Yes. One has to look at all the circumstances, I concede that, Your Honour, but - - -

McHUGH J: But you have to say that the content of the advice and the content of the questioning would be different, depending whether the solicitor is acting for both or one. That is what you have to say, have you not?

MR SLATTERY: All I really have to say is that procedurally, to overcome this tendency to promote consensus, that ordinarily there ought to be at least a separate conference with - - -

McHUGH J: That means nothing. You can have a separate conference; you can have a conference with all of them there but it does nothing. It is a question of what is said at the conferences that is important. So, is there any difference between what the solicitor is required to do if he is just acting for one client or if he is acting for the both of them?

MR SLATTERY: So far as the content of the advice is concerned, no. But it is the taking of steps to ensure that separate attention is given to each of his clients which is where the difference arises for a solicitor acting for more than one party. The judge has found here - he has given us the causation finding for which we contended that if there had been a separate conference where this had occurred then it is likely that this transaction would not have proceeded.

So, we put it procedurally, in effect, and say that the very danger or mischief which is created by this kind of multiple acting, regrettably, a common situation, is one which can be cured by this procedural remedy. The judge has found that that would have resulted in the solicitor checking the client and that the transaction would not have proceeded.

Your Honours, much of what I wished to say in extenso has been raised in the questions which have come from Your Honours but could I just mention a few points. The breach and causation findings in this case make it a particularly apt vehicle to determine this question which we say - and we have referred in the application book and in the outline to the survey which was done in New South Wales of the numbers of conveyancing transactions conducted in the country where a solicitor acts for more than one party.

Your Honours, we say this is a matter in which special leave should be granted, also, because the decision below is wrong. What we say is that if the standard for which we contend, which is set out in that statement of the learned President of the Court of Appeal, is found to be the appropriate standard, then several of the findings of the Court of Appeal, not merely the matter concerning a separate conference but the findings as to the amount of information given by Mr and Mrs Cameron to the solicitor about whether the finance they had was okay - the words used - or sufficient; that did not give the solicitor sufficient information on which he could act to determine whether or not there were dangers in finance from bank sources or family sources. The question of whether the vendor finance of which he knew would create difficulties with meshing with bank finance that they would obviously be undertaking and also the size of the transaction in relation to these clients. They are all matters which, if the duty is stated in those terms and there had been a separate conference, we say, would have emerged and, in effect, would have resulted in a reversal of the decision below.

Your Honours, those are the submissions of the applicants.

MASON CJ: Yes. Thank you, Mr Slattery. The Court need not trouble you, Mr Nicholas.

The argument to be presented in support of the proposed appeal seeks to raise a question concerning the appropriate standard of care in the circumstances of this particular case. As such, it raises a question of fact, not a question of general principle. The case is therefore not an appropriate one for the grant of special leave. The application is refused.

MR NICHOLAS: I ask for costs.

MASON CJ: You do not resist that, Mr Slattery? The application is refused with costs.

AT 11.17 AM THE MATTER WAS ADJOURNED SINE DIE