Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd & Ors [2012] HCATrans 216 (7 September 2012)

Last Updated: 10 September 2012

[2012] HCATrans 216

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S95 of 2012

B e t w e e n -

HUNT & HUNT LAWYERS

Applicant

and

MITCHELL MORGAN NOMINEES PTY LTD (ACN 108 571 222)

First Respondent

MITCHELL MORGAN NOMINEES (No. 2) PTY LTD (ACN 111 009 557)

Second Respondent

ALESSIO EMANUEL VELLA

Third Respondent

AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD

Fourth Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 SEPTEMBER 2012, AT 10.36 AM

Copyright in the High Court of Australia

____________________________________

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR N. KABILAFKAS for the applicant. (instructed by King & Wood Mallesons)

MR B.A.J. COLES, QC: If your Honours please, I appear with MR S.B. DOCKER for the respondents. (instructed by Mills Oakley Lawyers)

GUMMOW J: Yes, Mr Coles. There is a submitting appearance from the third and fourth respondents, Mr Vella and the ANZ Bank. Yes, Mr Jackson.

MR JACKSON: Thank you, your Honours. Your Honours, the issue in this case is the approach to be taken to sections 34 and 35 of the Civil Liability Act 2002 (NSW) and they are provisions which have their equivalence in other Australian jurisdictions. You will see that referred to in the application book at page 263, footnote 3. Your Honours, the object of the provisions are stated in broad terms. It was to bring an end to the principle that in case of multiple wrongdoers, whether joint or several, each wrongdoer was liable to pay to the plaintiff the whole of the plaintiff’s loss. That aim, your Honours, was effected by section 35(1).

If I could take your Honours to that provision, your Honours will see that as is apparent from – it is set out, for example, in the application book in our written submissions at page 263. If one goes to section 35(1) as is apparent from its terms, there are relevantly two aspects which have to be satisfied before section 35(1) applies. The first is that the proceedings involve “an apportionable claim”. I will come back to that your Honours. Secondly, that the wrongdoer seeking the benefit of section 35(1) is, in terms of the provisions, a concurrent wrongdoer and, again, I will come back to that.

Your Honours, as to the first of those things, it was not in issue that the claim against us was a claim which was an apportionable claim as defined in section 34(1). Your Honours, and, as is referred to in section 34(1A):

there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

Now, your Honours, then in relation to concurrent wrongdoers, your Honours will see the term “concurrent wrongdoer” defined in section 34(2). Your Honours, for there to be current wrongdoers there have to be:

two or more persons whose acts or omissions . . . caused, [either] independently of each other or jointly, the damage or loss that is the subject of the claim –

Your Honours, could I go then to page 265 and to paragraphs 24 and 25 of our written submission at page 264 I should have said. In the present case, there had to be, of course, the “two or more persons” referred to in the definition. The “two or more persons” had to be persons:

whose acts or omissions . . . caused, [either] independently of each other or jointly, the damage or loss that is the subject of the claim.

We were one such person. The combination, if I could put it that way, of Caradonna and Flammia, the fraudsters, were, we contend, the other. Section 34(1A) makes it immaterial that the causes of action were different. So, the question which then arose and arises was whether the loss or damage, I use the expression in an order of events in 34(1A) or the damage or loss is a reversed expression in section 34(2), was the same.

Now, your Honours, in that regard may I go to the facts very briefly of the matter? In that regard the respondent was a lender. It lent money on the security of a mortgage over land, nothing very unusual about that, quite the norm really. In the event of default by the homeowner or the owner of property, very often a homeowner, it gives the lender the ability to recover the money lent in two ways.

One, by payment by the borrower, the other is by exercise of rights in relation to the security if the amounts are not paid or repaid timeously by the borrower. The loan, in fact, was procured without the authority of the person nominated as a borrower, a Mr Vella. The money was misappropriated by Caradonna and Flammia from the borrower. The respondents could not recover from them the moneys lent because they became bankrupt. The respondents could not recover the money from the mortgagee – sorry, could not recover the money from the use of the mortgage because it had been drafted by us in a way which did not allow that to happen.

Now, your Honours, this is a situation where the loan would not have been made without the mortgage security being part of the transaction. Equally, the mortgage security would not have been required unless there was the loan. The two were interrelated. Now, your Honours, in circumstances where the transactions involved a loan of money on a mortgage security, it is, we would submit, with respect, difficult to see why the loss sustained by the respondents, and one is speaking of loss – the word used relevantly by the statute – by the loss sustained by the respondent is not the inability to recover from each of the two possible sources the money so advanced.

Your Honours, yet the Court of Appeal arrived at a different conclusion and it did so for reasons to which may I take your Honours now. First of all, page 217, and your Honours will see at page 217 about line 15 on the page what was put in paragraph 33was that the question whether we were a concurrent wrongdoer, was answered by whether we were:

one of two or more persons...“whose acts or omissions . . . caused, independently of each other or jointly, the damage or loss that is subject of the claim”.

That is the question. No question about the manner in which the question was posed. But it is, with respect, one thing to say that in relation to that paragraph considered in isolation. Your Honours, it is apparent when one moves on from paragraph 33, we would submit, that the approach to the issue has not been the correct one. If I could go, your Honours to paragraph 34 on page 217 and, in particular, to the last four lines of that – last sentence of that in the last four lines, it was asked:

Did the acts or omissions of Mr Caradonna and Mr Flammia giving rise to their liabilities to Mitchell Morgan cause, even if independently, the loss the subject of Mitchell Morgan’s claim for economic loss against Hunt & Hunt?

But, your Honours, if one looked at that question in the light of the base facts of the case, one would submit, that it would seem capable really of one answer and that one favourable to our side because but for the loss – but for the acts or omissions of Caradonna and Flammia, there would have been a no-loss to be recovered on the security. Your Honours, one then sees in paragraphs 36 to 41 at page 218 and following, a discussion of the issue. May I endeavour to put shortly what is said there?

In paragraphs 39 to 40, the proposition is put that the economic loss is not simply a financial detriment but also the economic interest and the harm to it. There is then set out in paragraph 41 the approach taken by the statement of the – approach taken by the Court of Appeal. Your Honours will see, if I could go to paragraph 41 commencing around line 20 there is a reference to the non-merger of damage with damages, of course. But, your Honours, having said that one then sees about line 20:

At the correct level of identification, in the present case there are different interests. Mitchell Morgan could be fraudulently induced to pay out money. It could protect itself and avoid losing the money if it obtained adequate and enforceable security. The loss, or the harm to an economic interest, is in the one case paying out money when it would not otherwise have done so, and in the other case not having the benefit of security for the money paid out. The losses [last sentence] are different.

Now, your Honours, that conclusion, we would submit with respect, is erroneous. If one looks at page 220 about line 20 on the page - - -

HAYNE J: Line number?

MR JACKSON: I am sorry, about line 20 again. Your Honours, you will see what is said there in line 21, I think, it said:

Mitchell Morgan could be fraudulently induced to pay out money. It could protect itself and avoid losing the money if it obtained adequate and enforceable security.

The point we would seek to make about that, your Honours, is that whilst in that part of that paragraph, the Court of Appeal recognises the interrelationship of the two transactions in relation to being the loss of the same money, on the one hand, but on the other hand then adopts a form of description in the last part of paragraph 41 which really turns upon the steps leading to the loss of the money as distinct from the actual loss itself. Your Honours, the - - -

BELL J: Can I just interrupt at this point to take up the way the Court of Appeal goes on to reason in this part of its reasons and that gives some significance to its observation at about line 22 “if it obtained adequate and enforceable security”. It goes on to make the point that the security as it happened exceeded the amount by which Mitchell Morgan had been defrauded but it could well have been that it did not exceed that amount in which case, as I understand the way the court reasoned, one sees a distinction between the nature of the loss.

MR JACKSON: Your Honour, the fact that if one has a loss which if one describes it as a line from A to B, the fact that not all the loss between A and B was caused by one party does not mean that the loss that is caused by both parties does not fit within the statutory provision. It may easily happen in circumstances where there is some form of limitation of liability for one of a variety of reasons that that is the case. Your Honours, one goes on to see if one goes to paragraphs – I am sorry, your Honour – one goes on to see in paragraphs 43 and 44 at page 220, your Honours we would submit an endeavour to explain the matter set out in paragraph 41. But your Honours, it does, we would submit, suffer from a central difficulty which one sees about line 18 on page 221. Your Honours, there it is said that:

The acts or omissions of Messrs Caradonna and Flammia did not cause . . . the loss the subject of Mitchell Morgan’s claim for economic loss against Hunt & Hunt.

But they did. A central step on the way to reliance on the security was the fact that the amount lent was not recovered or recoverable. Your Honours, we refer to that in our written submissions at page 265 in paragraphs 32 to 35 and, your Honours, may I say in particular, as we say in paragraph 32 that it is very often the case that:

it will be possible to describe the loss or damage flowing therefrom [different acts or omissions] in different terms –

And, your Honours, one needs to look at the loss or damage as a matter of substance not form and, your Honours, the approach taken by the Court of Appeal failed to provide a, we would submit, principled basis to distinguish the two losses, one from the other, and we elaborate upon that in the remainder of those paragraphs to which I - - -

GUMMOW J: Could you just go back to section 34(2) for a minute. It deals with this expression “concurrent wrongdoer” and we come down to this expression “caused” the “damage or loss that is the subject of the claim”. Now, putting aside the way the Court of Appeal deals with it, how would you deal with it?

MR JACKSON: Well, what we would say, your Honour, is that one has to look first to see what is the loss or damage that is the subject of the claim.

GUMMOW J: Which is, here?

MR JACKSON: In this case, it is the inability of the respondent to recover from one of the other two parties to the lending transaction the amount that was lent – leave aside questions of exact quantum but the amount that was lent. I say for exact quantum because of the observations Justice Bell made to me. So, your Honours, one asks then going back to section 34(2) was there – did each of the two persons engage in acts or omissions which caused that loss?

In each case, one can say that they did. One, the loss on the one hand from Caradonna and Flammia was to get money fraudulently which they did not ever intend to repay. On the other hand – then, did not repay it – and on the other hand, we had drafted a mortgage security which did not provide for money to be recoverable from the land notwithstanding the fact that it might have been drafted in such a way.

GUMMOW J: This mischievous term “caused”, what content do you give to it? Lots of things have been said about what is carried in one context by the term “caused” might not be carried in another context?

MR JACKSON: Quite, your Honour, yes. Your Honour, “caused”, I suppose we would say in the same sense as one sees it used in other contexts in the law, that is it is caused or materially contributed to. Your Honours, I know that is something that needs further explanation and examination in relation to particular cases but having said that one is looking to see the connection between the events and to put it shortly, your Honours, in the present case each of the actions of each of those parties were a cause of the loss and your Honours will see, of course, from section 34(1A) that it can be caused by different causes of action and on in section 34(2):

acts or omissions . . . independently of each other or jointly –

GUMMOW J: But, I think what you are saying to us is that a notion of material contribution is enough.

MR JACKSON: Yes. Your Honour, it would be enough for liability in either cause of action, I would think. Your Honours, could I just say this that this Court’s decision in Mahony v J Kruschich (Demolitions) Pty Ltd[1985] HCA 37; (1985) 156 CLR 522 at 527 contains a specific recognition in the damages context that successive torts, for example, may cause the same loss. I do not think I need to take your Honours to that. But, your Honours, we also make the point at page 266 of our written submissions in paragraphs 36 to 43 that the money would not have been paid out if the mortgage had not been executed. They simply are not separate transactions. Your Honours, the - - -

BELL J: But the money would have been paid out had the mortgage been executed without negligence.

MR JACKSON: Sorry, your Honour, perhaps I was not making myself clear. What I was seeking to say was this. One is not talking about a circumstance where there are two unrelated transactions. That is the point I was seeking to make. Your Honours, could we also say that the approach taken in the present case seems – your Honours, I am sorry – may I have one minute to conclude what I wanted to say and it is this.

Your Honours, the approach taken in this case really treats the provisions of the Act as inapplicable to many cases, if not all cases of severable liability. That seems to rather to fly in the face of section 34(2) and it does not seem to accord with the observations of Justice Gaudron if I could actually take your Honours to this in Kenny & Good Pty Ltd v MGICA, tab 6, your Honours, thank you, page 413 at paragraphs 16 and 17. Your Honours will see in paragraph 16:

The interest that a mortgage lender seeks to protect by obtaining a valuation of the proposed security is not simply an interest in having a margin of security over and above the mortgage debt. Rather, it is that, in the event of default, it should be able to recoup by sale of the property, the amount owing under the mortgage. And that is also the interest of a mortgage insurer.

Your Honours, if one looks at paragraph 17:

Once the interest which calls the valuer’s duty [in that case] of care into existence is identified as the interest of the mortgage lender in recouping what is due under the mortgage in the event of default, it is simply a matter of common sense to treat the loss arising from inability to recoup as flowing from breach of that duty, except to the extent that that inability is, in law, referable to the lender’s own actions –

Your Honours, that is all I wanted to say about that aspect. Your Honours will see that there is another basis for special leave in relation to the question of interest referred to in our written submissions. Your Honours, we have set that out in paragraphs 52 to 54 of the written submissions, page 268. It is in relevant respects a visitation case and, your Honours, we would submit that this is an appropriate case in which the Court should play - - -

GUMMOW J: Looking at your draft grounds of appeal at 257, ground 2 is the one you have been addressing, the visitation point is ground 3, is it?

MR JACKSON: Yes, your Honour, yes.

GUMMOW J: Yes, Mr Coles.

MR COLES: If your Honours please, plainly there is no issue between the parties as to the operation of section 35 of the Act. It appears to be common ground as the words of the provision require that a defendant seeking to have his or her liability limited by the operation of that provision must show that he is a concurrent wrongdoer in relation to the claim brought against him – I will use the male pronoun for the moment – for economic loss arising from the failure to take reasonable care. That is importantly, that defendant must identify someone else whose acts or omissions also cause the same economic loss which is the subject of the claim against, in this case, the solicitors.

No one disputes, as we understand the position between the parties, that one must, therefore, identify what is the economic loss claimed to arise from the solicitor’s failure to take reasonable care. Your Honours were taken, I think, to - - -

HAYNE J: Does one enter the maze at that point or does one enter the maze at first identifying the loss that is sustained by the lender? Does one begin by observing that there is a loan that has been made, that loan has not been repaid?

MR COLES: No, in our respectful submission, the textual requirement from the definition in section 34(2) requires one to focus in the identification of one’s defendants or the defendant’s fellow wrongdoer, someone who has caused, independently or jointly, the damage or loss that is the subject of the claim – that being the claim against, in this case, the defendant’s solicitors.

HAYNE J: And that is the loss sustained by the lender?

MR COLES: That is the loss shortly sustained by the lender having no ability to enforce against the property, its security to obtain recoupment of the funds which it advanced.

HAYNE J: At a risk of oversimplification, I would understand the argument against you to be that there is a loan that has not been repaid. The fraudsters who got the money did not repay it. Security for the loan was not enforceable. Each is a material contribution to the ultimate consequence, the loan has not been repaid.

MR COLES: Yes. We accept that that produces the outcome that attends the assessment of the damages but, of course, it is the damage rather than the damages - - -

HAYNE J: I understand that. Where then is the slip which you seem to say there is in applying that analysis to 34(2)?

MR COLES: Simply because, your Honours, the damage - - -

GUMMOW J: Simply is a bit of an exaggeration.

MR COLES: - - - or let us say the loss that is the subject of the claim against the solicitors is the loss sustained by the lender in not having an enforceable security to enable it to obtain recoupment from the property. Of course, every lender who makes a loan on security and expects as an alternative to be able to recoup that money from the security in the event of the borrower’s default, here, of course, the person from whom the repayment of the money in a cause of action sense might have been made if they were solvent or not criminally disposed were the fraudsters. But, in that respect, the fraudsters are not in any particular different position, we would suppose, than the actual borrower.

But simply, there is not a recourse to a person liable to repay the money. The alternative recourse is, of course, not to seek the repayment of money from the person from whom it might be obtained because that is unavailing. The alternative recourse is to seek the repayment of the money from the security property itself and that is the loss, we say, which was sustained by the negligence of the solicitors in the way they prepared the mortgage. It is not the same loss.

One thing is very plain and it was common ground before the five Bench Court of Appeal, those important words which refer to causing the damage or loss that is the subject of the claim mean the same loss which is the loss which the defendant who is sued who seeks to have that loss limited by invoking someone else as the concurrent wrongdoer.

Now, again, it is clear enough that whatever it was and even if one accepts Mr Jackson’s proposition that material contribution will do so far as the causation element to which the section calls attention is concerned, even if one is concerned merely with material contribution to the loss, there is not, as both the full court of the Victorian Supreme Court said in Quinerts and as the five Bench court in the Supreme Court of New South Wales said, there is, in this case, nothing which the wrongdoers, the fraudsters or persons from whom a payment opportunity might be exploited in a litigious environment, nothing those persons did, nothing the fraudsters did that materially contributed to the negligence of the solicitors in drawing the mortgage in the way they did and, thereby depriving, i.e. causing economic loss to the lender, the recourse which a properly drawn mortgage would have provided to that lender as the fund from which the recoupment of its loss – its losses – might emerge.

So, in our respectful submission, one simply cannot find – and one can put it in various verbal formulations or descriptions or rearrangements of the facts, but no rearrangement of the facts can support a conclusion that there was anything done by the fraudsters or anyone else who might have been otherwise required to repay the money personally which contributed to the failure of the alternative recourse, namely, the ability to sell the property.

After all, as your Honours readily accept, the security is taken against the risk that people who borrow money, or for that matter people who steal money on forged mortgages, will not be able to repay it. Therefore, in our respectful submission, the loss could only be reasonably or rationally identified as the loss caused by the deprivation of a sufficient security.

GUMMOW J: You are reading the phrase, “the damage or loss”, as having some unity, the same damage or loss, is it not?

MR COLES: Yes. That is common ground, with respect, your Honour, as the Court of Appeal recorded. St George Bank v Quinerts, after a careful analysis, Justice Nettle explained why those words that your Honours are focusing upon, that is to say the damage or loss that is the subject of the claim are the drafter’s reformulation of the well-known expression in section 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 dealing with contribution between joint tortfeasors referring to the same damage.

GUMMOW J: Is the object of this provision to broaden, replace, expand the notion of contribution between joint tortfeasors?

MR COLES: We would say, your Honour, it is to act coherently and consistently with the provisions already in place to that end which deal with contribution. This, of course, deals with limitation of liability and exempts the defendant where he or she can avail themselves of it from the consequences of the insolvency or the like, liquidation, of somebody who might if sued be liable for the same damage. It goes that far but it would be – there is nothing in the text of the language that suggests it was intended to impose some more panoptic vision on the law of contribution than the express terms of the legislative provision supply announcement.

Your Honours, so that is, in our respectful submission, the crucial matter. The applicant’s central point, in our respectful submission, and I put this in – the applicants put really that the error they seek to identify in the reasoning of the Court of Appeal is that, in effect, the Court of Appeal made a mistake to identify the loss or damage the subject of the claim by reference to the acts or omissions which constitute the relevant breach of duty.

GUMMOW J: Our difficulty is one of puzzlement in a way. There seems to be a vast superstructure erected in these judgments upon this rather tersely expressed statutory provision. I am not sure the vast superstructure does not fall over.

MR COLES: Well, if it does, your Honour, it does - - -

GUMMOW J: It is distracting attention from what seems a rather succinct expression.

MR COLES: That is the real question. The real question is the statutory provision. In our respectful submission, our learned friends do not offer any solution to the demands of the statutory provision, namely, you must identify the loss and necessarily identify the loss by the constituent elements which form or give rise to the claim which may have something in the nature of a – the notion of a cause of action attending to it.

HAYNE J: Sorry, what is that proposition again?

MR COLES: One is required by the provision to identify the loss or damage the subject of the claim. As I said, that must be the claim that is made against the negligent solicitor because that is what the – it is the claim for economic loss that is the subject of the apportionable claim which is made against the defendant to whom section 35 is referring.

In short, the applicant in these proceedings, in our respectful submission, does not satisfactorily offer a solution to the process of identification of the claim other than that adopted by the Court of Appeal. Namely, what are the elements that lead to it and the features of causation which generate it?

HAYNE J: Where do we most conveniently find that in the Court of Appeal? Is that wholly in paragraph 41?

MR COLES: The introductory words of section 41 on page 220 start the matter off and it is important - - -

HAYNE J: I should say to you, Mr Coles, I have some difficulty with the first two, three sentences of that paragraph in quite grappling with the proposition that is being advanced and any assistance you could offer would be received whether gratefully or otherwise.

MR COLES: Well, in our respectful submission, your Honour, at the risk of adopting the second of your Honour’s reactions, it must be correct that the economic interest is not to be identified at a level of being generally financially worse off. In our respectful submission, that is the ultimate - - -

GUMMOW J: Where do we get this phrase, economic interest? That comes from 34, does it?

MR COLES: It really is picked up – 36 is really where the discussion starts. It does not refer to a claim for compensation but to the nature of the claim as one of harm to an economic interest or harm to an interest in property. Then they refer in paragraph 37 to the well-known distinction between damage or damages and in the first lines of paragraph 41, it is pointed out that the economic interest, in effect, needs specific identification lest one fall into the – which, in our respectful submission, would be the distillation of the – or the consequence - - -

GUMMOW J: It would apply to contract as well, it is not limited to tort. Why do we get into the thick of a tort as if that is the exclusive - - -

MR COLES: We certainly have not encouraged that view. The cause of action against the solicitors was as much a cause of action – available as a cause of action in contract as in tort.

GUMMOW J: Considering the statute, you just cannot worry about the law of negligence. It is the whole area of civil wrongs.

MR COLES: Yes, we respectfully endorse that entirely. If the claim is a claim in breach of contract, it is the breach of the term of the contract on the part of the solicitors to take reasonable care in the preparation of the security documentation. A feature or activity in which the unpaying wrongdoers, defaulting fraudsters, or any other person liable under the mortgage if it had been valid have no role to play at all. They are not persons who could have - - -

GUMMOW J: How does this section apply to trustees? Does it?

MR COLES: They could be defendants for an apportionable claim which is a claim, amongst other things, for economic loss caused by want of the taking of reasonable care.

GUMMOW J: Be an action for damages, would it?

MR COLES: For an action for damages, yes. It could also be – damages may well be apt to include equitable compensation.

GUMMOW J: I just think there is a lot wrapped up in these succinct words – statute.

MR COLES: There is not, we emphasise, very much doubt about the – although found via a process of peregrination through a series of definitions, the expression of central importance is that one must find the economic loss that is the subject of the claim. It would seem that in the definition “loss” refers to economic loss. “Damage” probably refers to property damage or damage to property and a claim certainly refers to the apportionable claim.

Therefore, one has the necessary link with the defendant. If the defendant is a solicitor and has made a mess of the mortgage, then you are looking to find people who caused or materially contributed for present purposes, if one accepts that description, the outcome that an unavailing security was reduced.

Defaulting borrowers and defaulting fraudsters and the like, non-payers, do not cause or materially contribute to the fact that the lender has no decent security. Indeed, the very reason the lender takes a security is against the risk that they will default or will be unable to pay. So, in that respect, your Honour, it would be - - -

HAYNE J: But you are identifying the relevant economic loss as sufficiently defined, I think, as being obtaining an unenforceable security?

MR COLES: Yes.

HAYNE J: Well, why should one do that?

MR COLES: Anything else - - -

HAYNE J: The consequence of the security being unenforceable that creates the loss, I would have thought.

MR COLES: But the reason why one should do it is one must identify the elements of the claim against the solicitor and the elements of the claim against the solicitor are necessarily not the same as the elements of any claim against some other wrongdoer or some other person liable under a mortgage. For example, a non-paying guarantor is hardly going to be a person who has caused the loss or damage the subject of the claim against

the negligent solicitor, in our respectful submission. They are our submissions, your Honour.

GUMMOW J: Yes, thank you, Mr Coles.

MR JACKSON: Your Honours, may I just say two things. The first is that our learned friends said a little earlier in the argument and then repeated in different words the same thing a moment or two ago that nothing that the fraudsters did materially contributed to the negligence of the solicitors. But, your Honours, one does need to look at section 34(2) and section 34(2) says that:

a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim . . .

So the fact that one might say nothing that the fraudsters did brought about the negligence of the solicitors, well, your Honours, so be it, as it were. But that is not what the statutory tests involved. The second point we would wish to make, your Honours, is that the starting point is to identify the loss. We sought to do so earlier.

Once one identifies the loss and the loss in the particular case is the inability to recover the money in advance from one of the two sources available at the time of the making of the advance. Once one does that it then is a matter simply of applying the terms of the statute. Your Honours, those are our submissions.

GUMMOW J: We will take a short adjournment.

AT 11.20 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.26 AM:

GUMMOW J: There will be a grant of special leave in this matter limited to the first of the grounds - that set out at page 257 of the application book. The other ground will be referred into the Full Court for further consideration. That is the ground appearing at page 258. Now, this will be a one-day case, I would think, gentlemen?

MR COLES: Yes, your Honour.

GUMMOW J: It would be suitable for hearing in November, I would think, would it, and in that regard perhaps we should give some timetable directions now, I think: firstly, that the submissions from Mr Jackson’s side, the appellant, be filed and served on or before 2 October; the appeal book be filed and served by the 12th; Mr Cole’s submissions, the respondent’s submissions, filed and served by 23 October and any reply by 30 October. It is somewhat telescope but if the parties can keep to that there will be no difficulty in getting the November date.

MR JACKSON: May I just mention one matter, your Honour, simply in relation to those. It is in relation to the question of ground 2.

GUMMOW J: Yes.

MR JACKSON: Now, at the moment there are submissions on both sides in the application book.

GUMMOW J: They probably do not need further submissions.

MR JACKSON: Well, it is a matter of whether the Court would allow further submissions if there are to be. I was just wondering whether the Court required or would allow further submissions.

GUMMOW J: It is probably best not to tie into them, although the submissions referred to can apply both to the ground on which leave has been granted and also to the ground referred in. Yes, thank you, gentlemen.

AT 11.28 AM THE MATTER WAS CONCLUDED