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High Court of Australia Transcripts |
Last Updated: 9 March 2016
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S161 of 2015
B e t w e e n -
GREGORY IAN ATTWELLS
First Appellant
NOEL BRUCE ATTWELLS
Second Appellant
and
JACKSON LALIC LAWYERS PTY LIMITED
Respondent
FRENCH CJ
KIEFEL J
BELL J
GAGELER
J
KEANE J
NETTLE J
GORDON J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 8 MARCH 2016, AT 10.13 AM
Copyright in the High Court of Australia
MR G.O’L. REYNOLDS, SC: May it please the Court, I appear for the appellant with my learned friends, MS R.C.A. HIGGINS, MR R.A. YEZERSKI and MR D.W. ROBERTSON. (instructed by L.C. Muriniti & Associates)
MR A.S. BELL, SC: May it please the Court, I appear with my learned friend, MR P.D. HERZFELD, for the respondent. (instructed by Sparke Helmore Lawyers)
MR R.P.L. LANCASTER, SC: May it please the Court, I appear with MR N.J. OWENS for the Law Society of New South Wales, which seeks leave to appear as amicus curiae. (instructed by Allens)
FRENCH CJ: Mr Lancaster, I think your attention has been directed to the form of order that was made in Levy in relation to intervention. Do you have any instructions in relation to that?
MR LANCASTER: I do, your Honour. In the event that such a term is required by the Court, the Law Society accepts it – that is, the application will be pursued, but at a convenient time I would wish to say one or two sentences about the different circumstances in Levy if the Court would hear that argument. The underlying instruction is the application will be pursued if there is to be such a term.
FRENCH CJ: Yes, well, you had better address us now on whether, if leave is to be granted, it should be granted on such a term.
MR LANCASTER: The distinguishing feature between the Law Society’s application and the circumstances in Levy is as follows, as we see it. Firstly, there are a number of interveners in Levy, each of which was a commercial party in the true sense of the word – Fairfax and The Seven Network and newspaper publishers, each of whom had a direct commercial interest in the scope of the freedom of communication about political matters.
The intervention, as the judgment in [1997] HCA 31; 189 CLR 579 at 585 indicates, the case was adjourned and a resumed hearing undertaken in this Court for the explicit purpose of allowing such interveners to come forward and to make such submissions as they were instructed to make. So there was a real question as to costs in that case in the sense that there had been an adjournment and a resumption of the hearing in this Court and that they were commercial parties protecting their direct interests.
We would respectfully submit that the Law Society is in a different position in this case. Whether one regards the distinction between amicus
and intervener as one that is not really defined by a clear line, putting that issue to one side, the Law Society of course is here in its capacity as a representative professional association for the solicitors of New South Wales. It has had imposed by statute various regulatory functions of which the Court would be aware and so it is in quite a different position, in my respectful submission, to the interveners in Levy and for that reason we contend that the appropriate order would be to allow leave to appear as amicus but require no term as to payment of the other parties’ costs occasioned by the appearance.
FRENCH CJ: Yes, thank you, Mr Lancaster. Mr Lancaster, the Court is of the view that your client should have leave to intervene on the basis that it bears the cost of the parties occasioned by the intervention.
MR LANCASTER: May it please the Court.
FRENCH CJ: Thank you. Yes, Mr Reynolds.
MR REYNOLDS: Your Honours, as I understand it, have received a written outline.
FRENCH CJ: Yes.
MR REYNOLDS: Your Honours will have seen from the submissions and from that outline there are two main issues in this appeal. The first is whether the immunity – I will call it advocate’s immunity – applies to the circumstances of this case. The second is the issue or the potential issue as to the abolition of the immunity and argument being presented on that issue. Can I deal with the issues in that order? A convenient starting point is the decision in D’Orta-Ekenaike [2005] HCA 12; (2005) 223 CLR 1, which I will refer to, if I may, as the D’Orta Case.
FRENCH CJ: Just before we get to the decision, Mr Reynolds, can we just clarify the nature of the process before the primary judge which was the subject of appeal to the Court of Appeal. Although there was a document called, I think, a statement of “Proposed Agreed Facts” before the primary judge, is it correct to say that in truth the matter was approached on the basis that the question was whether the immunity defence was a complete answer to all the allegations in the statement of claim? There were no agreed facts, as such, were there?
MR REYNOLDS: Yes, there were. This is dealt with by the Chief Justice at paragraph 26 of his reasons on page 90 of the appeal book where he repels the suggestion that this was a case of a notional demurrer which is, I think, what your Honour the Chief Justice is putting.
FRENCH CJ: Yes. I am just wondering about the status of the agreed facts.
MR REYNOLDS: He says there – and there is no notice of contention on this – that these facts were – there is a separate question on agreed facts. So effectively your Honours can delete the word “Proposed” where it appears on the top of page 32 of the appeal book.
KIEFEL J: The agreed facts, so-called, appear to be excerpts from the amended statement of claim and no more.
MR REYNOLDS: They take many paragraphs, and others, from the statement of claim and also additional ones and translate them into facts, rather than averments in a statement of claim.
KIEFEL J: Well, they are still allegations. I mean, particulars of negligence are still allegations, but you are saying that they were all accepted as facts for the purpose of the exercise.
MR REYNOLDS: Yes, I am, and I say that that is the effect of what the Chief Justice says at paragraph 26.
FRENCH CJ: So, does that mean that it was an agreed fact that – I am looking at 34 to make sure I am not misreading this - that:
In breach of the implied term of the retainer and in breach of duty, the defendant was negligent in and about giving the advice.
MR REYNOLDS: Yes, your Honour.
FRENCH CJ: Counsel for the respondent does not seem to agree with you.
MR REYNOLDS: One can understand why they might try to argue otherwise. It looks like somebody on one side of this Bar table did not look perhaps closely enough at the nature of these agreed facts before they were agreed.
KIEFEL J: Was there an order noting them?
MR REYNOLDS: Yes.
KIEFEL J: What is the formality of this?
MR REYNOLDS: The order is page 41, at about line 30, and also it is reproduced at page 39, at about line 21.
GORDON J: The difficulty with that, Mr Reynolds, is that on page 40 the ex tempore judgment records that that separate question is to be decided on the basis of the assumed truth of the allegations in the amended statement of claim, which seems to be separate from the statement of agreed facts.
MR REYNOLDS: As I understand it, these facts were agreed. Once they are agreed, they cannot be treated as mere allegations.
KIEFEL J: Well, how can we be certain that they have been agreed?
MR REYNOLDS: As I say, that is the effect of what the Chief Justice says at paragraph 26.
FRENCH CJ: Then, at page 41, paragraph 4, again in the ex tempore judgment:
In this case the parties are agreed that the immunity question can be determined on the basis of what is alleged in the amended statement of claim and the defence to that amended statement of claim -
Regardless of what the Chief Justice said, it is a bit difficult to see how the parties were proceeding on an agreement that one of them had been negligent. In a sense it does not make any difference to your argument in this Court because your argument must be on the basis that you take the statement of claim at its highest.
MR REYNOLDS: Certainly. I have proceeded on the basis of what the Chief Justice says. What it does impact on is the order which we would seek because the order which we have circulated - I think your Honours should have a copy of it. The effect of that is to ask, in substance, that the matter be remitted, if we are successful, simply for the assessment of damages, so that follows through on the line - - -
FRENCH CJ: That is on the assumption there has been a concession as to liability?
MR REYNOLDS: It is, yes, entirely. Your Honours, I do not want to make a big deal of this.
FRENCH CJ: This is not what the case is about.
MR REYNOLDS: No, it is not, but that is, we say, the effect of what the Chief Justice has said.
KIEFEL J: Just to be clear about it, Mr Reynolds, when his Honour refers to the agreed facts, it is only to this document, “Proposed Agreed Facts”, that his Honour is referring?
MR REYNOLDS: Yes, and he was told, as I understand it, that they were agreed facts.
KIEFEL J: Does that appear anywhere in the transcript?
MR REYNOLDS: I have not checked that, your Honour, but your Honour sees that they are in paragraph 26. They are either agreed or they are not. There is a way, obviously, of framing a separate question, as a matter of law, as a notional demurrer – that is, treat what is in the statement of claim as allegations and, as your Honour the Chief Justice said, taking them at their highest, is that case defeated by the immunity pleaded in the defence?
FRENCH CJ: Yes.
MR REYNOLDS: That may have been what one or more people were trying to achieve, but that is not how it was, I have submitted, translated onto the record. As I say, I do not have anything further to say about it - - -
FRENCH CJ: Yes, all right, let us proceed.
MR REYNOLDS: It only really goes to the question of the framing of the orders, and doubtless my learned friend will have something to say about that in due course.
FRENCH CJ: Yes.
MR REYNOLDS: If your Honours go to paragraph 86, a lot of copies of 223 CLR no doubt fall open at this page, because it is the paragraph that is normally referred to as a statement of the immunity. Your Honours will no doubt have seen in the third line the words:
“work done out of court which leads to a decision affecting the conduct of the case in court” –
Now, there is a further qualification or a statement of a different version of the test a little lower down but we suggest that one needs to look at this test in a little more context to understand it rather than just pulling out those words I started with from this paragraph. One needs to look, for example, at the characterisation of the person bringing such an action. For example, is it a client, is it a client who is a litigant, is it a losing litigant client, et cetera, as opposed to other forms of plaintiff? Also, as to the person who has the immunity, we tend to think of it applying to advocates because that is the way the case law has preceded – that is, barristers and solicitor advocates. But this case, if one looks at the test at paragraph 86, may expand the case well into the area of what I will call solicitors’ negligence. Your Honours will perhaps have seen in paragraph 91, over the page, the words in the third line:
or as solicitor instructing an advocate –
Anyway, I do not want to go into those aspects of the context, those two I just touched on. What I want to focus on is another aspect of the context, which is what I will call the circumstances to which or in which the immunity attaches. I want to take as my focus to begin with a section of the judgment of Justice McHugh, which your Honour Justice Gageler raised on the special leave application. That is at paragraphs 166 to 168 of the judgment. What happens, paraphrasing it to some extent at paragraph 166, is that Justice McHugh reviews the plurality judgment and says – this is four lines from the bottom of 166:
as the judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ demonstrates, public confidence in the administration of justice is likely to be impaired by the re-litigation in a negligence action of issues already judicially determined.
There is a similar statement in the first four lines of paragraph 168. If your Honours go to the top of paragraph 166, he says:
it is possible to sue a practitioner for the negligent settlement of proceedings -
So what he is saying, as a matter of construction of the plurality judgment, is that public confidence in the administration of justice is likely to be impaired by relitigation of matters which have already been decided by a court. He says that if the issues, the subject of the action against the lawyer, have not been decided by the court, as in the settlement situation, then that rationale for the immunity will not apply and, therefore, if a solicitor or barrister is sued for negligent advice in relation to the settlement the immunity will not apply.
The proposition that he is proceeding on perhaps only implicitly there is that a proposition put, for example, by Sir Anthony Mason if your Honours have the decision in Giannarelli v Wraith (1988) 165 CLR 543 and relevantly at the top of page 560, where he refers in the fourth line on page 560 to the proposition that “to take the immunity any further”, that is and he has just referred to:
would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity.
So the ambit of the immunity, its rationale if you like, must be, he is saying, co-extensive there with the relevant rationale. That is, we submit, what Justice McHugh is saying at paragraphs 166 and also at paragraph 168. Now, that, with respect to his Honour, is not a novel concept. His Honour was probably picking up very similar statements that were made in the decision of the House of Lords in Saif Ali v Sydney Mitchell [1980] AC 198.
There is a very important passage, we submit, in Lord Diplock’s speech at pages 222 to 223 – to be more accurate, from 222D through to page 223P. I would ask your Honours to read the whole of that in due course, but can I just highlight a few aspects of what his Lordship there says. The paragraph beginning at page 222D, he talks about similarly to Justice McHugh “the need to maintain the integrity of public justice”, and he says that:
An action for negligence against a barrister for the way in which he has conducted a case in court is founded upon the supposition that his lack of skill or care has resulted in the court having reached a decision that was not merely adverse to his client –
but was also “wrong” because otherwise no damage could be shown. At letter E talks about a “wrong decision” and at the bottom of that paragraph “he would have succeeded instead of failed”. At letter F, he talks about “correcting a wrong decision” and around G he talks about the:
principles of public policy, which also discourage collateral attack on the correctness of a subsisting judgment of a court of trial upon a contested issue by a re-trial of the same issue - - -
FRENCH CJ: Is there a distinction between a concern about attacks on correctness and a concern about finality?
MR REYNOLDS: We say that this is ultimately the way this immunity is framed by the plurality in D’Orta and I will be coming to that in a moment, but it is essentially the same concept, the same context which is being addressed, that is, that the nature of the action which is the subject of the immunity is an action of a particular kind, namely, one which involves a collateral attack upon a decision of the court.
Now, his Lordship continues on at letter G where he talks about a “re-trial of any issue decided against a barrister’s client”, at H of a “re-trial”. Over the page at letter B, decision in the “previous trial was wrong”. At the end of that paragraph at B “caused the wrong decision” and then he says this:
My Lords, it seems to me that to require a court of co-ordinate jurisdiction to try the question whether another court reached a wrong decision and, if so, to inquire into the causes of its doing so, is calculated to bring the administration of justice into disrepute.
This is, perhaps, the most important bit, just above letter E:
A similar objection, it may be mentioned, would not apply in cases where an action has been dismissed –
That would be, for example, to give your Honours a reference to a case in this Court, the situation which applied in Johnson v Perez, that is, where an action had been dismissed without a contested hearing. His Lordship says:
or judgment entered without a contested hearing –
and I interpolate, as here:
and there is no possibility of restoring the action and proceeding to a trial. If the dismissal or the entry of judgment was a consequence of the negligence of the legal advisers of a party to the action, a claim in negligence against the legal advisers at fault does not involve any allegation that the order of the court which dismissed the action or entered judgment was wrong.
We submit that that is part of the essence of the operation of this immunity. This is the situation to which the immunity is directed and this is the concern which certainly the majority of the House of Lords had in this case. At the bottom of page 214H, Lord Wilberforce says that the:
immunity. . . depends upon the public policy. In fixing its boundary, account must be taken of the counter policy that a wrong ought not to be without a remedy. Furthermore, if the principle is invoked that it is against public policy to allow issues previously tried (between the client and his adversary) to be relitigated between client and barrister, it may be relevant to ask why this principle should extend to a case in which –
which is not the facts of this case:
by the barrister’s (assumed) fault, the case never came to trial at all. These two considerations show that the area of immunity must be cautiously defined.
To similar effect, we would suggest, is the statement by Lord Keith, the other member of the majority, at page – sorry, not Lord Keith, Lord Salmon at page 232 at letter F. Can I also give your Honours a reference to one of the dissents, Lord Keith, at page 237A, who wanted a much broader test of the immunity and in criticism, as it were, of the majority holding, he says at letter A that:
The suggested restriction –
that is, of the other members of the House of Lords:
of the immunity would presumably exclude from its scope all cases relating to contemplated litigation which did not actually reach the stage of a hearing in court, and all litigation settled, compromised or abandoned.
If one goes to the actual facts of this case - - -
FRENCH CJ: Just before you go to the actual facts, if one assumes that an attack, an action against a barrister for advice leading to a consent order or a solicitor in connection with the proceedings, leading to a consent does not involve impugning the correctness of the decision, does it still engage the finality principle in some way?
MR REYNOLDS: Well, I will be dealing with that to some extent later but - - -
FRENCH CJ: Do you say they collapse into the same thing or do you accept that finality is a wider concept than correctness, impugning correctness?
MR REYNOLDS: Well, it depends how one frames finality and I will be putting an argument to your Honours in the course of the argument, in the course of what I wanted to say about my application to re-open the correctness of D’Orta that explores that particular issue but we would submit that there is a line of doctrine here that starts with - and I will be going to this later on - the decision in Rees v Sinclair which is the New Zealand case which was applied in Saif by the majority and then through Saif to Giannarelli and then through to D’Orta.
The statement of principle in each of these cases leading up to D’Orta, first of all is consistent with the proposition that I am putting and we would go further and submit that the principle that I am putting is also directly supported by those cases and by the, as Justice McHugh says, the plurality judgment in the D’Orta decision. Now, so far as - and I will be 30 seconds on this – the actual facts of Saif Ali were concerned, there summarised, that around 224F, he just says this:
The work which the barrister in the instant case is charged with having done negligently, viz., in advising as to who was to be a party to an action and settling pleadings in accordance with that advice, was all done out of court. In my view, it manifestly falls outside the limited extension of the immunity - - -
But what of course actually happened there is that there was a later decision by the court. Now, the point that Lord Diplock and Justice McHugh are there making is that in this situation the administration of justice is brought into disrepute if there is this form of collateral attack on the judicial decision. The point that Justice McHugh is making at paragraphs 166 and 168 is that the administration of justice is in no way brought into disrepute where there is no attack on an actual decision of a court which of course is the situation where there is a settlement, whether or not that leads to consent orders or not.
Well, is Justice McHugh’s interpretation of the majority in this D’Orta Case correct? We would submit that it is and can I take your Honours to some relevant passages in that regard.
KIEFEL J: Just before you do, the references to “an order of the court”, the distinction that it is not being said that the order of the court or the decision is wrong carries with it connotations of there being facts which might be shown to – something underlying it which might be susceptible to a different view of the facts, or different facts put forward. My question is, is it to say anything more than the order would have been otherwise, or does it mean more than that?
MR REYNOLDS: No. There is, for example, consent orders made, and somebody comes along – there is no judgment; there is no review by the judge of the facts, analysis, the evidence, the witnesses, the issues of law, what have you. All there is is some kind of consent order. For someone to come along afterwards and say “if my case had actually gone to a hearing, the likely result of it is such and such”, then that does not bring the administration of justice into disrepute.
It does not involve a situation where somebody is going through – as in the other situation, where there is a judgment – and saying there would have been a different result on this, and his Honour would have decided that question differently on issues of fact, and he would have decided this question of law differently if this had been put to him, what have you. The kernel of what they are saying is that that brings the administration of justice into disrepute. I will be saying something in response to that on the issue of reopening and overruling - - -
KIEFEL J: I suppose what I am really asking is, I wonder how helpful it is to say that one can draw a distinction where it is not said that an order of the court is wrong or not, because the essence of an action for negligence usually is that but for the action, the ultimate order would have been otherwise, and that would apply in this case.
MR REYNOLDS: Yes, but again, as I have said, taking this reasoning, this justification – this core justification for the immunity, as their Honours stated – there would not, as Lord Diplock says, be any difficulty with a case being run after it has been dismissed otherwise than on the merits, which is the actual case against a solicitor in Johnson v Perez – I will get you the reference in a moment – or in other situations where there simply is not an extant series of reasons for the decision and where the judge has not actually decided anything.
The reference to Johnson v Perez (1988) 166 CLR 381, which is the situation that Lord Diplock was adverting to at letter D on page 223, where he talked about an action being dismissed without a contested hearing. I do not want to overly finesse this, but just stepping back a little, all we are really saying is what does it matter if the only relevant involvement of the court has been to enter orders that the parties have been agreed on. If somebody wants to come along later and say if the case had actually been run, and run through to completion, then the following result would have obtained.
That does not, we submit, diminish the administration of justice one iota, just as it did not diminish the administration of justice one iota when Johnson v Perez after the action had been dismissed otherwise than on its merits, the court went through the exercise of saying what would have happened if this case had not been dismissed for want of prosecution – which are the facts in that case – but otherwise had been run and been the subject of a judgment?
Another way of putting it is that you do not get conflicting judgments or reasons for decision. You just get one final analysis by a judge as to how the case should be decided rather than a first judgment where the second judge then, as it were, investigates at some level what the first judge did in his or her reasons for decision, his or her treatment of the facts, the law, the witnesses and what have you.
If all you have is an involvement of a peripheral nature in the making of orders to dispose of the litigation, we submit that the relevant rationale for this rule is not offended and, stepping back from it a little, there is absolutely nothing wrong with such an action any more than there was anything wrong with the action that was brought in Johnson v Perez.
KEANE J: So to come back to the question the Chief Justice asked you earlier, is what you are saying that the finality concern is not with the general notion that there should be an end to suits but that the correctness of decisions of courts should not be impugned by a collateral attack on the way that decision was reached?
MR REYNOLDS: Yes, your Honour, I say that the statement of the immunity should be limited in a way that is very, very close to the way your Honour just stated. I would put it perhaps ever so slightly differently if the action were to involve a collateral attack on the correctness of a decision of the Court.
FRENCH CJ: Just going back to the point you were making earlier, you would say that the worst case money judgment against your client, if it had gone to trial, would have been 1.8, plus costs?
MR REYNOLDS: Yes, and here there are consent orders and my client’s action down the line will result, for the first time, in the first reasons for decision dealing with his action, the original action. Or it reviews it and says, “This is the way that case would have been decided if it had been run,” rather than “This is the way the earlier decision should have been resolved” – that is, differently from the way that it was by reason of changing the substratum of fact or law in a way that eliminates the relevant negligence of a practitioner.
KEANE J: Mr Reynolds, I have a bit of a difficulty with that in the sense that – and I may not be understanding the facts correctly, but looking at the consent order and the agreed facts, I do not understand your case against Mr Bell’s clients to be that they negligently advised your clients that they had a liability for $3 million when everyone knows they only had a liability for one point whatever it was under the guarantee. The grievance, as I understand it and I confess I am not entirely sure how the agreed facts work, grievance seems to be about a new charter of rights, not the liability under the guarantee but the new charter of rights under the terms of the settlement under which a new liability was assumed.
Now, whether or not the assumption of that liability was consistent with the exercise of reasonable care by Mr Bell’s clients might depend upon whether it was worth your client’s while to get another five months to pay, whether the fact that there were assets in the company that – or under securities given by the company that it might have become available, or may not, that your clients and the company would have been relieved – well, the company would have been relieved of the balance of the liability above 1.7, the company would have been discharged from that, whether that was valuable to your clients because of the nature of their interest in the company. All these things would seem to be matters that would be litigated because the real complaint is not about negligent advice about what they were obliged to pay under the guarantee but whether the settlement was a good deal.
MR REYNOLDS: It is very difficult, I submit, given the nature of the agreed facts to analyse the matter in accordance with the sort of distinctions that your Honour is raising – which, of course, are very relevant to the existence of negligence and causation. The problem is, and I freely confess it, that the statement of the facts – the agreed facts – does not enable the kind of hyper analysis that your Honour is, with respect, engaging in at the moment which would be, I submit, more than appropriate obviously at the trial.
The difficulty at the moment is that there is a measure of opacity about the way – exactly the way the case would be conducted at trial particularly on the issues of negligence and causation and your Honour is, with respect, picking up on that. Now, the situation at the moment is that I cannot really do anything about that. I accept the measure of opacity but I would not dissent from the summary which his Honour the Chief Justice put to me a couple of minutes ago as to the essential gravamen of my client’s concern in this case.
GORDON J: Mr Reynolds, I am a bit lost. I do not quite understand that. If you go to paragraphs 12 and 13 of the statement of agreed facts, or extracts from the pleadings, the case pleaded is a complaint about advice given, advice about the effect of the proposed new deal, the terms of the deal, what was told to your clients about those terms and the effect of them. It has nothing to do with the way in which the trial would have been conducted. It is a separate plea.
So on any view of that pleading there would not be an assessment of what would have happened in court on the old claim. This is a separate new claim about whether advice was given and, if not given, should have been given about a new deal – new terms of settlement.
MR REYNOLDS: Yes. In order to assess the damages in the case we have to look at putting my clients back in to the position they would have been had the alleged negligent advice not occurred which involves looking at what would have been the likely result of the case if it had been litigated in due course. The point of departure that I have fixed on is that that would be an analysis that is conducted for the first time by the relevant judge at the hearing of the case against the solicitor. But there is a difference, I submit, between the way the case is put, both on duty and on negligence and causation and on the question of the relevant characterisation of the case for the purposes of the immunity.
Your Honours, I need to go to the – to try and make good the suggestion made by Justice McHugh that the plurality judgment in the D’Orta Case supports the analysis which he gives to it at paragraphs 166 and 168. One aspect of that is to focus on paragraph 31 of the D’Orta decision where your Honours will see that there is a quotation from Sir Anthony Mason in Giannarelli and this is connected to footnote 59 where he talks about:
“the adverse consequences for the administration of justice which would flow from the re-litigation in collateral proceedings for negligence of issues determined in the principal proceedings” . . . was held to be determinative.
If your Honours go to the footnote, that is, footnote 59, there are a series of references there. Can I add into footnote 58 the discussion at page 558 of Sir Anthony’s judgment? Can I note that in footnote 59 the reference to page 579 of Justice Brennan is where he agrees with the Chief Justice. The rest of those references all go to this notion of the tarnishing of the administration of justice if there is a collateral attack on issues determined in the principal proceedings.
There are a number of other paragraphs that I would take your Honours to in that regard. I am losing my grip on the time because I have only got a short time under my agreement with Mr Bell to get through all these issues. But can I refer your Honours to paragraphs 74, 75, 78, particularly 79, 80, 37 and 42? But can I dwell just briefly also particularly on paragraphs 67 to 70 and 81 to 83 because this is a central portion of the discussion of the way this immunity operates in D’Orta.
Your Honours will see that there are three consequences that are mentioned there – a wrong final result, a wrong intermediate result, and wasted costs, which, I will be submitting in a moment, is talking about adverse costs orders. Each of those three situations involves a decision. In paragraph 67, second line, the client has lost the case. In paragraph 68, we are talking about conviction with imprisonment. Paragraphs 69 and 70 mention an adverse result from a wasted costs order, and there is a similar statement at paragraph 83, halfway down –
To challenge the costs order, therefore, will often . . . involve a direct or indirect challenge to the outcome on which the disposition of costs depended.
This is the focus that their Honours have in each of these three core instances, the first being, as they say, the paradigm – this is paragraph 72 – the paradigm case’s final result, and that is in paragraph 67. All of these instances fall within what I am suggesting is the relevant principle, namely that there has been an actual decision.
Of course, your Honours will recall the facts in the D’Orta Case were consistent with that because there, there had been, looking at paragraph 68, a conviction. If your Honours go to our outline at paragraph 1.8, we have collected there some cases which support the proposition that any statement of principle has to be looked at in the context of the particular facts and context of the case.
In all of these cases, we are dealing with a situation where the issue they were addressing had involved an earlier decision by the court. We have two things that work here; we have statements, I suggest, of principle about the need for a decision, and then secondly, in all of these foundational cases, the facts are consistent, I submit, with the proposition that I am putting, and that the statements of principles in these cases need to be looked at in the light of that particular context.
GAGELER J: In D’Orta, the conviction was on a plea of guilty, was it not?
MR REYNOLDS: Yes. What happened in D’Orta was – it is what they call in that case an intermediate result. What happened is the client was convicted. The conviction was later overturned after an appeal, but there had been for present purposes a decision made by the Court, which is the proposition that I am trying to establish. I am pretty sure I know exactly where your Honour is going here - - -
GAGELER J: Well, it is pretty obvious where I am going, but what is the answer?
MR REYNOLDS: We are talking about whether the decision is subsisting, which is where I understood your Honour was leading.
GAGELER J: A decision on the merits is what I understood you to be looking at.
NETTLE J: It was a decision on the merits in D’Orta. He was allowed to withdraw his plea and convicted because reference was made to - - -
MR REYNOLDS: That is what I am trying to get to. But I thought your Honour’s mind was travelling on a little to the notion of: “Well, hang on, would that apply to a situation where a decision had been made” – which is my proposition and I am trying to get to – “but is no longer subsisting.”
GAGELER J: I think it was also the case in Giannarelli.
MR REYNOLDS: It was, exactly. That is what I am hoping to finish with. But if your Honour will bear with me for one moment while I find the relevant passage of my notes we submit that is a problem when we come to the issue of reopening and reagitating the correctness of these decisions because, put shortly, where is the tarnishing of the administration of justice in launching a collateral attack on a decision which is no longer subsisting? I took your Honour’s question to ultimately be directed to that.
That is a view, to anticipate things, which Lord Diplock took in Saif at page 222G – my note is that the Supreme Court of New Zealand in Chamberlains v Lai also took that view, or one of the judges did, at paragraph 55. Your Honour understands that I am performing a bit of a straddle here. The first part of my argument assumes that the immunity exists and, at one level, I have to kind of support it or support a version of it. I then have to turn around at the back end of my argument and then attack the very immunity or the ambit of the immunity that I have asked your Honours to uphold.
I accept the inconsistency, but that is the way I would respond to that issue by concluding that a better way of putting it if one is going to have this rationale is that there be a subsisting decision but that would involve, as your Honour Justice Nettle said to me, some inconsistency with the actual decisions in D’Orta and Giannarelli. At the moment, I am hanging onto them for grim might and their correctness and trying to say that the submission I am putting comes fairly and squarely within those two cases.
We submit that that approach that Justice McHugh discerns in the plurality judgment in D’Orta is a correct reading of the plurality judgment. Your Honours will have seen that much of the reasoning in D’Orta, particularly at paragraphs 85 to 87 involves their Honours wrapping themselves, as it were, in the mantle of the earlier decision. They say, well, we adopt what is said in D’Orta, no challenge has been effectively made to that reasoning. Just above 88, we apply Giannarelli to this case. They are saying that they are fairly and squarely within the way the Court reasoned in Giannarelli in these paragraphs.
Now, the notion that I have taken your Honours to in Justice McHugh’s judgment and in Saif Ali and also in D’Orta, is also replicated in the Giannarelli Case. Can I take your Honours briefly to those references? At page 558 about a third of the way down the page, your Honours see this reference in Sir Anthony’s judgment from about point 3 to about point 8 and again he is talking here about collateral attacks on decisions, tarnishing public confidence, disappointed litigants and decision in the initial litigation, and that is the passage I said had been left out from the footnote in D’Orta that I took your Honours to a moment ago. At page 573, at the bottom of the page, Sir Ronald Wilson talks about relitigation and the fourth-last line:
with a view to proving that the original decision was wrong . . . If the negligence action succeeds, then the original decision, notwithstanding that it may have been affirmed on appeal, is necessarily tarnished by the later inconsistent decision.
I would ask your Honours to read the rest of page 574 at your Honours’ leisure. Justice Brennan at page 579, point 7, agreed with the Chief Justice’s reasoning relevantly, and there is also a discussion in Sir Daryl Dawson’s judgment, which I take you to the bottom of page 594, where he talks about weightier considerations, so this is in the context of important matters. At about point 8:
The first, to my mind, is the availability of an action in negligence for the conduct of a case in court would subject the decision of the court to collateral attack by a client who sought to blame his barrister for his loss of the case. Not only would this mean relitigation of issues already decided, but the relitigation would be –
et cetera. Then over the page, he talks about, at the end of the paragraph at point 3 on 595:
the policy that there be an end to litigation. If the decision of a court is wrong, the appeal process –
that assumes the decision, of course –
is the means by which it should be corrected.
Now, just to conclude matters, can I give your Honours some references to the Rondel Case which is perhaps the second last of the foundational cases which I said are consistent and can I just give your Honours some brief references to the fact that this was a case about wrongly convicted, that is, in that case it had not been overturned on appeal. I will give your Honours a reference to pages 195F, 230B to C, 236C, 249 to 251, 253E to G, 258A and 275E.
FRENCH CJ: So the proposition – you have given us a lot of numbers, what is the proposition you are - - -
MR REYNOLDS: The proposition is they do not actually – I have said there are two things - one is facts which are consistent with my proposition and where the statement of principle occurs in that context. This is an example of that in Rondel. It is not an example of where they state the principle in the way that the passages in Giannarelli do. All I am saying is you have a line of cases where both the factual substratum and the statement of principle into that has consistently been a situation where there has been a decision of a court, not the situation that Lord Diplock referred to where you have orders which are made otherwise than on the merits.
So obviously what I am trying to get to, I have called these cases the foundational cases: Rondel chronologically I just mentioned, then there is Rees in 1974 which I will come to in a moment in New Zealand, then Saif Ali in 1980, then Giannarelli and then D’Orta-Ekenaike, and the theme of the – more than a theme of the plurality judgment is that they are adopting Giannarelli and Giannarelli has this consistent line back through these various foundational cases.
Now, I have asserted that the decision in Rees is consistent with the proposition that I am putting. I have to own up to a slight difficulty with that and that is that the decision in Rees v Sinclair – let me put it this way. It was a matrimonial case which involved a husband being annoyed with his barrister for not putting certain things in cross-examination.
That, I think, tells your Honours about the next point, relevantly, which is that the facts of the case are not fully reported in either the judgment of the Court of Appeal which is [1974] 1 NZLR 180, or for that matter, the judgment at first instance which is [1973] 1 NZLR 236. But there is, if I can refer your Honours to this, quite a good potted summary of what the case involved in the Saif Ali Case at page 232 in the top half of the page where your Honours will see the facts which I assert necessarily would have involved a previous adverse decision of the court but I concede I cannot actually prove that definitively.
In short, your Honours, I submit that the interpretation of the immunity given by Justice McHugh is the correct one and that it is consistent with D’Orta - its correct reading of D’Orta and its consistent statements of principle and the approach taken in each of these foundational cases.
FRENCH CJ: Now, relevantly to this case, is it an accurate statement of a proposition that is sufficient for your purposes that, whatever the scope of the immunity, it does not extend to negligent advice by an advocate merely because the advice leads to a consent order disposing of the proceedings?
MR REYNOLDS: Yes, because that involves no collateral attack on the correctness of a decision of the Court and that is the proposition I am trying to get to and I say supported by the observations of Justice McHugh and your Honours know that I say by all of the other cases as well. That is really the first part of the first half of the case. Obviously, if your Honours accept that reading of the immunity, on one view your Honours need not go any further but I have to assume, obviously, that your Honours may not accept that.
If your Honours do not, then I need to look a little more closely at this immunity and its provenance. If your Honours go back to paragraphs 85 to 88 of the decision in D’Orta, I have already said that their Honours repeatedly say in those paragraphs that they are very happy with the decision in Giannarelli, they do not need to reconsider it, they do not need to depart from the test in it, they are happy to adopt the criterion and in the heading above 88 they actually apply Giannarelli to the case. So one would think that this analysis here is what one might call a straight lift from the decision in Giannarelli.
I want to go back and have a look briefly at Giannarelli. Before I do, Justice McHugh purports to give a potted summary of the reasoning relevantly in the Giannarelli Case at paragraph 151, if your Honours go to that. Your Honours see there a statement of the recent Sinclair test and his Honour notes that the majority adopted that statement.
FRENCH CJ: I am sorry, now can you just give me the page reference for Giannarelli that you are - - -
MR REYNOLDS: This is D’Orta, I am sorry, at paragraph 151 on page 51 of the D’Orta judgment, where Justice McHugh says that in Giannarelli the majority adopted the test in Rees v Sinclair which he states. If your Honours go to footnote (196), again page 579 is Justice Brennan agreeing with Sir Anthony Mason, but can your Honours add in next to Justice Dawson a reference to page 588 at point 9 over to 589, point 1, which needs to be taken in conjunction with page 596. Justice McHugh notes:
The passage had also been adopted by the House of Lords in Saif Ali v Sydney Mitchell & Co as the appropriate test.
So if we go back to Giannarelli, and a convenient page that is often referred to is page 560, I want to look briefly at what Sir Anthony Mason reasons his way towards a conclusion in this case. If your Honours go about six lines down on page 560, he says, I submit, unambiguously that he would agree with what Justice McCarthy said in Rees v Sinclair and he then refers to the test Justice McHugh had quoted that I mentioned a minute ago. He says:
“. . . the protection exists only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing.”
Now, your Honours will notice that the issue is whether the work, that is, the work which is the subject of a claim for negligence, whether it can fairly be said to be a preliminary decision, et cetera. He says that this is a “persuasive statement”, that it “was indorsed by four members of the House of Lords in Saif Ali”, and heaps further praise on it. He says:
Once this view is accepted, the immunity necessarily extends to a decision about the way in which the proceedings for perjury under s. 314 were to be conducted. Just how such a decision –
that again picks up the words of the test –
came to be made we do not know –
Again, as in this case, perhaps a problem with the facts, and this is important, he says:
But it is more likely that counsel thought –
et cetera. So he is talking here about counsel’s decision, and if one goes to the bottom of that paragraph at about point 8, this was a decision not to raise a particular section of an act as a defence. So that was counsel’s first decision. Secondly, a forensic decision not to raise it as an:
objection to the reception of the evidence.
So, Sir Anthony is, first of all, I say, clear as a bell adopting this statement in Rees. Second of all, he is interpreting it in such a way that the relevant work is a decision by the advocate and it is a decision about the way the case was to be conducted and the two species of that proposition are raising it in court as a defence and also raising it as an objection to evidence. He says, well, we do not know when that decision was made because the facts are not clear. That is at point 5 on page 560, but a decision by the advocate it certainly was and, therefore, it comes within the immunity.
Now, a couple of other matters about this test in Rees v Sinclair - I would like to emphasise briefly in the context a couple of statements in the Saif Ali Case, if your Honours could turn back to that? The first is that there is a statement – this is Saif Ali v Sydney Mitchell – at 224 at about letter E where Lord Diplock talks, I would submit, about the rationale for this test. He says there that the immunity in court:
is not to be circumvented by charging him with negligence –
out of court. The same point is made at 231H – the underlying reason or one of the underlying reasons for - bottom of page 231 - a:
device to circumvent this immunity –
are the words I am talking about – it is not to be used – I withdraw that. What one cannot – excepting that there is an immunity for negligence in court, which is a given in this discussion – they are saying would it not be silly if someone made a decision – a barrister made a decision not to cross-examine or not to run a point in the courtroom and is not immune. But if he made that same decision, or she made that same decision, say, the day before in chambers, out of court – a decision, for example, they are not going to cross-examine a witness or they are not going to call a witness, or they are not going to put a point, they are not going to put a defence, not going to argue a particular matter of admissibility – I say would it not be silly if you could circumvent the immunity in that way.
The other important point that all the three Lords in the majority in this case say is that this exception, that is, the exception to the general notion that work out of court may be the subject of a negligence action, they say that exception – or, I would submit, the immunity – is one which is very narrow, rare and limited. The references to that are at 215A, 216A to B, 224A to C, 224F and 231D.
They make it very, very clear that this is a very, very narrow extension into that area - not, for example – and I will be picking up this theme later, and this was the majority view – all or even some general conduct of litigation. It is only if you come precisely within this particular formulation. As Sir Anthony Mason said, quoting Justice McCarthy, the protection exists only where that particular test is satisfied.
As further proof of that, can I finish with Saif Ali on this point? They found that the particular negligence in that case was clearly outside the immunity. They say that at, for example, 224G, 216B, and 232F. That particular case, as I think I noted before – this is noted in the headnote – was about including a party in a pleading, settling pleadings, et cetera.
I mentioned the Rees Case. Can I go back to that briefly – this is Rees v Sinclair – and note just three passages. This is the judgment that is endorsed in Saif Ali, which was in turn endorsed in Giannarelli. The first reference is at page 187 of that decision, at about line 20, where Justice Macarthur, having just stated the test which everyone refers to, says:
The protection should not be given any wider application than is absolutely necessary in the interests of the administration of justice –
At page 187, at about lines 35 to 40, your Honours will notice that he too talks about a decision by Mr Sinclair, who was the advocate. That is the relevant negligence there, as again the decision by the advocate. At page 190, at about line 16, Justice Macarthur says that the immunity should be confined to what he calls –
the true work of an advocate –
I submit there is not much doubt that when one looks at this Rees test, as one might call it, that it is a very narrow test. It is really confined to what might be called an advocate’s forensic decision-making out of court. Would that, to cut to the chase, cover advice by counsel relating to the settlement of a case? I submit that it is tolerably clear that it would not. If your Honours go back to the statement of the principle at page 560 at point 2 in Giannarelli in Sir Anthony Mason’s judgment, the relevant immunity only applies where the work is a preliminary decision, as we have said, by the barrister about the way the case is to be conducted.
Now, I submit again that it is tolerably clear that advice, for example, about tax position or capital gains tax on a judgment or quantum or what have you, which may be relevant to a client settling a case, on no view amounts to a decision by the barrister which can fairly be called a preliminary decision affecting the way the case is to be conducted. It is a difficult call to suggest that that statement of principle, this narrow exception, should be so extended, for example, to settlement advice and no matter at what stage it occurs. That, as your Honours heard earlier, is the view that Lord Keith took in the Saif Ali Case – this is at page - - -
FRENCH CJ: That advice within the immunity would cover advice as to concessions, agreed facts and so forth.
MR REYNOLDS: Well, in that instance, your Honour, that is not what I would call true advice; it is not what one might call Hedley Byrne advice because that is really the barrister advising the client of what his decision is. So it is not a situation where there is advice given by the barrister to the client and the client then makes - - -
FRENCH CJ: Well, if it is in a criminal case, for example, there might be a formal admission and that might be the result of advice.
MR REYNOLDS: Again, it is still a matter for the barrister.
FRENCH CJ: Or the client in the end.
MR REYNOLDS: But in that instance it is a matter for the client. The point that I am making is that this particular statement of the immunity in Rees is, as I say, about forensic decision-making by the advocate out of court on a matter which is, as I would put it, within his or her bailiwick – that is, the actual conduct of the case in court. The sort of thing on which a solicitor cannot give counsel instructions or the client cannot give counsel instructions is a matter for counsel and what he does in court in the conduct of the case is the subject of the immunity and likewise his or her decision as to how he or she is going to conduct a case made in chambers in relation to what happens here is likewise within the immunity.
But the immunity, I submit, does not go any further and it does not extend in any blanket form to advice generally because the sort of situation where you are talking generally about advice being given to a client and then acts on it and makes a decision accordingly and then give instructions cannot be fitted within this particular statement of the immunity.
NETTLE J: What about an advice to plead guilty? Where would you say that lies - within or without the immunity?
MR REYNOLDS: If one unpacks that a little, the question of whether or not a client pleads guilty is ultimately a matter for the client. A barrister, not one worth his or her salt, would ever say that that is the barrister’s decision. What the barrister would do is give advice on integers that may be relevant to the client making the decision, which is his or hers alone, about whether or not to plead guilty. To respond to your Honour, that situation, I submit, does not come within this particular test of immunity.
KIEFEL J: The passage that you took us to from Justice McHugh’s judgment in D’Orta at paragraph 153 suggests it may not be quite so clear cut because his Honour makes the point that a plea of guilty may come with an immunity depending upon the timing of the plea because it affects the sentence imposed, so it brings into account decisions made critically in the conduct of proceedings.
MR REYNOLDS: Your Honour, there is a little bit of an enigma here, which I promise I am going to attempt to uncover in a few minutes. But can I, acknowledging that I am not for the moment responding to your Honour, say that I will attempt to and respectfully invite your Honour to remind me if I do not deal with that issue.
KIEFEL J: I will.
MR REYNOLDS: What I am trying to get to is a first base in my argument, which is essentially this. If one looks at this decision in Rees, referred to by the majority judges in Giannarelli, and one interprets it, for example, as Sir Anthony Mason clearly interpreted it – your Honours have heard what I said about that – then it will not apply to advice vis-à-vis settlement.
Can I give your Honours some other references to that authority on that proposition. We have listed them at paragraph 2.8 of our outline. I think I referred already to each of those. Can I just dwell on the Arthur Hall Case for a moment. I have said enigmatically that there are four cases there. What I mean – and I should make this clear – is that the Supreme Court overruled the immunity in Arthur Hall. The Court of Appeal applied the Rees test to four cases. In each of those four cases they found that the immunity did not apply to the relevant settlement advice.
So, this is an example, I respectfully suggest, where, notwithstanding the High Court has taken a different view of things, where the discussion in Lord Bingham’s judgment is still of some relevant value and has not been, as yet, superseded in terms of its relevance for this particular country.
My learned friends refer, as do many judges in this context, to the decision in 1978 in New Zealand of Biggar v McLeod which is referred to at 2.8 of our outline. They rightly say, but hang on, in the very jurisdiction from which this Rees test that you are relying on emanates, when the Court of Appeal had to consider this very situation they held that settlement advice was within the immunity. So that, they submit, is a substantial problem.
Your Honours, even though this places at a great deal of influence – and I would submit unfortunate influence – over the analysis of this issue, there is a very clear riposte to Biggar v McLeod and it is this. On no view, does this case actually apply the test in Rees v Sinclair which they had held to be applicable only four years before. Can I demonstrate that and I submit it is clear by reference to the following passages? The judgment of Justice Woodhouse, with whom Justice Quilliam agreed – at page 12 at line 5 let us look at how he states the immunity. He says:
I think the expression used by Lord Reid “the conduct of litigation” properly indicates the kind of situation which ought to give rise to the protection.
At line 37, again:
the conduct of litigation –
At line 41:
the conduct of litigation –
or, it gets even wider:
part and parcel of the work of counsel in carrying forward the proceedings to a conclusion –
at line 45. This is not the Rees test. This is the minority view in Saif Ali from the very judges that rejected the Rees test. The statement also on page 11 at line 34 again – work related to the conduct of the litigation. As I say, Justice Quilliam agreed with his Honour. There is a further statement of discussion at page 14 where Justice Richardson gets a little closer to the test – and I will not go through it all – but I respectfully submit, footles markedly with the text of it and then fails accurately to apply. That, we submit, is the response to Biggar v McLeod and we submit that their failure to apply the Rees test is clear beyond argument.
Now, that is the position that obtained prior to the decision of this Court in the D’Orta Case. After the D’Orta Case, there were some cases and we refer to them, I think, in outline that found that settlement advice was within the immunity but I have to concede that probably a substantial number, and particularly in the New South Wales Court of Appeal, did not. Those cases after D’Orta, or many of them, found that settlement advice was not within the immunity so there is a little bit of a divide there in the case law.
Now, the reason that this happened, and this is the riddle I referred to before in answer to your Honour Justice Kiefel, there is a reason for that and that is that if your Honours go back to the D’Orta Case around paragraph 86, where, as I have said at least twice, the plurality are intending to adopt and reaffirm the test in Giannarelli and to apply it, what happens is that there is - a rather bizarre thing happens, I submit, and if your Honours go to paragraph 86, your Honours will see in the third and fourth line, the expression I started this appeal with, namely:
“work done out of court which leads to a decision affecting the conduct of the case in court” -
Now, when reads that quickly one says, well, that is the Rees test that you have just been talking about. It appears, as their Honours say from, if your Honours go back to Giannarelli at page 560, it appears as part of the leading - top of page 560, second and third lines - are leading to the statement by Sir Anthony Mason of the test he clearly adopts, namely the Rees test, but he puts it, if one looks at those words and lifts them out of context, I am suggesting they may lead to a different interpretation.
That is what happens at paragraph 86, is that this Rees test somehow slips through a crack and we end up with a more opaque test derived from what I submit, at the top of page 560, is little more than an introduction, or prefatory words leading to the statement of the actual test that is adopted. The problem is that if one goes back, particularly in the light of - - -
KIEFEL J: It may not be that Chief Justice Mason is simply stating something prefatory to the reference to Rees v Sinclair. In the sentence before, it is clear that his Honour is actually linking the words “must extend to work done out of court” to the work out of court which is inextricably linked with “presentation in court”.
MR REYNOLDS: Yes. There is a general discussion that starts at page 559 - - -
KIEFEL J: Page 559.
MR REYNOLDS: - - -about halfway down. It leads in - - -
KIEFEL J: So it may be that, rather than being prefatory, all I am saying is that those words “work done out of court” which leads to a decision affecting the conduct of the case need to be read in the context of “presentation in court”.
MR REYNOLDS: I submit the words at lines 2 to 3 need to be read in the context of, and must be read in the context of, the test which, on any view, Sir Anthony adopts. I put that in my lead-in on the discussion of this Rees test, so that I could present the argument without your Honours necessarily seeing where it was going to go, but so that I had a clean run at it. I will not repeat what I said earlier, but when you go through that page, I respectfully submit that it is not open to my learned friend to submit that this is other than an adoption of the Rees test. I submit that is an impossible construction of it. If any of the words of Sir Anthony are to be read in the light of any other, the words in lines 2 and 3 need to be read in the light of the Rees test which is adopted.
FRENCH CJ: Well, sufficient unto the day so far as you are concerned is that neither the formulation nor the underpinning policy of the test ties the immunity to advice yielding a consent order disposing of the proceedings.
MR REYNOLDS: That is my first point. Where I am leading to, perhaps in too meandering a way, is to the proposition that your Honours should either treat paragraph 86 as a misapplication, if you like, of the test that was referred to in the Giannarelli Case, or if one has to have, as the alternative submission, a contest between what I will call the Rees test and the D’Orta test, that the Rees test should be preferred.
Just pausing there for a moment, your Honours understand, I hope, my first point of limiting the immunity in the way Justice McHugh suggested. Where I hope to have got to now is to a submission, to put it clearly, that your Honours should adopt the Rees test and not be diverted by the opacity of the – putting it perhaps too high – the paraphrase of that test that appears at paragraph - - -
BELL J: In application, the Rees test, looking at the work of the barrister out of court, would be covered on your submission by asking the question, is this decision one that could have been the subject of instructions?
MR REYNOLDS: I think I would put it slightly differently. I would hug the test in Rees but, your Honour, I think your Honour is probably very close to what I am submitting because there is a divide which all barristers and former barristers know and it is the divide between what is a matter for instruction and what is not, and what is not a matter for instruction is the conduct of the case in court.
KEANE J: Is not that the point that is being made by the word “intimate”? It is the intimate connection between the work of the barrister and the work of the court, the work of the barrister as an officer of the court in setting that which the court must decide, in making concessions, in making admissions.
MR REYNOLDS: Your Honour, I agree entirely but the problem with it is if one uses an expression like “intimate” then where does intimacy start and where does it finish?
KEANE J: Well, I mean, perhaps it starts and ends with an understanding of the role of counsel in the conduct of litigation.
MR REYNOLDS: I am sorry, I was not meaning to sound like I was criticising your Honour. What I am getting to is a criticism, as your Honours understand, of the slight opacity in this test at paragraph 86, and I think - - -
KEANE J: But their Honours go on to say that they do not think that is any different from the “intimately connected with” test - - -
MR REYNOLDS: No, and - - -
KEANE J: - - - which is taken from Rees.
MR REYNOLDS: - - - it may be that what we have here is a judgment based on a full understanding, an analysis of Giannarelli, perhaps, not adverting to the fact that the words by Sir Anthony at the top of page 560 are not exactly the same as those that appear about four or five lines later, and having in their Honours’ minds something which is in substance identical to the view that was taken by Sir Anthony in Giannarelli. I do not think, so far as I can work out, your Honour and I are anything other than ad idem on that. The Rees test on one view gives greater specificity, perhaps greater content to the more generalised statements that are at paragraph 86.
One can make the two cases work together in that way because their Honours are - your Honours have heard these statements a number of times – they are obviously intending to apply Giannarelli, they are seeking to adopt it, re-adopt it and say that the test is correct and it would be unthinkable, particularly in that context, that their Honours would be seeking to supplant an earlier test without dealing with the potential differences in some detail.
GAGELER J: Is it necessary for the purposes of your argument to confine the area within which the immunity operates to that area within which a barrister cannot be expected to act on instructions in court? I am thinking of the running of a defence which was one of the particulars of putative negligence in Giannarelli. Now, ordinarily, one would think that the running of a particular defence would be a matter for instructions.
MR REYNOLDS: I put it this way, your Honour. I do not want to be adopting a line any different from the Rees test. It may be that that test could be further sharpened along the lines your Honour has just put to me – that is, by reference to a sharp divide as to what is a matter for instructions and what is not. But I submit that the Rees test is informed by those considerations – that is, that a matter which is a matter for counsel will more likely be within the immunity and on the other hand a matter which is not for counsel and which is a matter for instructions we submit that would be very difficult for that to be held to be within the immunity.
What we are obviously on here is the problems that your Honours know only too well about the drawing of so-called bright lines on particular tests. What your Honour puts to me, with respect, is that difficult cusp case, which really sets up some of the difficulties in analysing these concepts.
Your Honour is not, with respect, the first to ponder quizzically about such issues. For example, if I can give your Honour just one reference, to see somebody else on an ultimate Court of Appeal teasing out that sort of question, Lord Salmon in Saif Ali at 231 through to about H, where he is trying to work his way along that line also. I hope that is at least a partial answer to what your Honour - - -
GAGELER J: I have a follow-up question. We are still dealing, I think, with Part 2 of your argument – paragraph 2?
MR REYNOLDS: Yes.
GAGELER J: It is really a question of whether you need to go so far for the purposes of this case to argue that Biggar v McLeod wrongly applied Rees in its country of origin. Can you not accept that some advice bearing on settlement will also be advice that will concern the conduct of a case in court?
MR REYNOLDS: Your Honour, I do find that a difficult question
to answer. The way I have approached Biggar v McLeod is to
treat it as aberrational and I submit that the statements that are made by the
first judge –
I think it was Justice Woodhouse –
are a very, very long way from being the correct test. Your Honour’s
question is directed
to the possibility of my introducing a little more
flexibility or play into the line that I am plugging on this Rees test,
then obviously I am happy to embrace that up to a certain point. The difficulty
is provided settlement advice obviously is
outside the immunity.
What I mean by that is that if one sticks to this purported bright white line, then I submit we know what the answer is. I submit that that test, adopted by the Court of Appeal in New Zealand, by the House of Lords in Saif Ali, and referred to, as Justice McHugh says, in those four judgments in Giannarelli, is that unless a case is put up for a different test – and I would suggest the practical onus is on my friend – then that is the test that ought to be applied. Could I live with a case that is a little more opaque – your Honour might say “flexible” – I would really need to look at that version of the test before giving a clear answer.
KIEFEL J: How would you say the Rees test should be applied in the case where advice was given to settle an issue, a discrete cause of action, in a multiple cause piece of litigation, with the result that the client then concentrates on another cause of action and fails, and then wishes to say that the settlement advice was misleading?
MR REYNOLDS: It is quite similar in some ways to the Saif style situation where a particular – admittedly it was a different party then, on a different cause of action – but where the framing of the case was held to be outside the - - -
KIEFEL J: But it would be intimately connected with the further conduct of the litigation. It would then be conducted on a different basis because of the settlement advice.
MR REYNOLDS: Again, depending on what your Honour Justice Keane raised with me, what content is given to intimate connection and I would submit in what I hope direct response to your Honour is that that situation would not be within the immunity going back to this test in Rees. That is a decision made by the barrister concerning the conduct by him or her of the case in court. This is why your Honour is asking me – it tests my proposition a little, but that is my answer.
I have to truncate things a little – I am sorry, your Honours – because, notwithstanding I have to deal with the small issue of reopening and reconsideration, I am a little bit over time on my agreement with Mr Bell. I have not reached that point yet. But your Honours understand, with respect, the submission that I am making, that the Rees test on one view should be re-adopted or reaffirmed and if it comes to a contest between what I have called the Rees test and the D’Orta test, then the Rees test should be preferred.
In that regard, can I adopt proleptically the arguments that I am going to make, respectfully I hope, in criticism of the D’Orta test in the next few minutes. Can I proceed to that issue and try and deal with it with some dispatch. I am not going to go through some of the preliminary issues such as the appropriate procedure in some of the earlier cases your Honours see in section 3 of our argument. What I would like to do, to try and shorten things, notwithstanding the importance of - - -
FRENCH CJ: Well, you are seeking leave of the Court to reopen D’Orta and Giannarelli?
MR REYNOLDS: Certainly D’Orta- I would submit largely for reasons I have indicated and am about to indicate the reasoning in Giannarelli has been to a large extent displaced by D’Orta. I have referred to the test, although as your Honour Justice Keane says, the two may be compatible but there is very different reasoning, but for safety first, your Honour, I do seek leave to reopen the correctness of both decisions - certainly D’Orta, and to the extent that I need to, Giannarelli.
FRENCH CJ: Now, in addition to anything you have already said, is there anything you want to add, just on the question of why we should grant leave to reopen or reargue that test.
MR REYNOLDS: Well, in a sense I need to put, your Honour has done this a few times before and so have I, and sometimes this Court has proceeded on the basis that one needs to have a sort of preliminary hearing on leave and then sometimes it proceeds - - -
FRENCH CJ: You can take it that on this occasion we want to hear why we should grant leave.
MR REYNOLDS: Can I say this, your Honour, in a sense I have to present the whole of the argument but your Honour is asking me to summarise my - - -
FRENCH CJ: We have seen, of course, the argument in your written submissions.
MR REYNOLDS: Yes, well, what I - - -
GORDON J: Is it any more than what is set out at 3.11 of your outline?
MR REYNOLDS: That is the gist of it, yes, your Honour, and I have put that in there so that if necessary I can speed through that process but we submit that they are the main reasons, including and importantly the one at the top of page 3, that is (v) that the decision is wrongly decided. Now, that is where the shoe begins to pinch, Chief Justice, because your Honour knows what that means. It means an argument which is effectively the - - -
FRENCH CJ: Substantive argument, yes.
MR REYNOLDS: Exactly. So, that is my difficulty is that - - -
FRENCH CJ: Well, I think we understand the basis upon which you seek leave, Mr Reynolds. The Court will adjourn briefly to consider what course it should take.
AT 12.07 PM SHORT ADJOURNMENT
UPON RESUMING AT 12.15 PM:
FRENCH CJ: Mr Reynolds, we are of the view that you should be permitted to put your argument on the merits of Giannarelli and D’Orta and the immunity, and we will reserve on the question of whether we reconsider those cases.
MR REYNOLDS: If the Court pleases. I mentioned, your Honours, a moment ago, I have now reached the point where I should be sitting down, and I will need to try and truncate my argument to try and honour the time division agreement that I have with - - -
FRENCH CJ: You will bear in mind that we have your written submissions, of course.
MR REYNOLDS: Yes, your Honour. With that in mind, can I try and reduce my argument, as it were, primarily to point 4. Obviously, I have done that on reopening and reconsideration in paragraph 3.11, as your Honour Justice Gordon pointed out. I need to address, as I said, (v) – that is, the issue of whether the reasoning in D’Orta, with respect, is wrong. Can I just try and boil down the principal points that I make in that regard.
Preliminary to those points is the observation that the approach to this immunity – leave aside the test – in the Giannarelli Case on the one hand and the D’Orta test on the other is, we submit, markedly different. In the Giannarelli Case, there is much more of a focus on what might be called public policy factors; a basket of them. Then, weighing that up, looking at it in the light of the elimination of an action which may have involved gross negligence, or even grave loss, if your Honours go to Giannarelli at page 588 at about point 5, Justice Deane talks about the public policy considerations, and he says they do not:
outweigh or even balance the injustice and consequent public detriment involved in depriving a person, who is caught up in litigation . . . of all redress . . . for “in court” negligence, however gross and callous in its nature or devastating in its consequences.
That style of approach with multiple factors and an overt public policy focus – your Honours know that this immunity has always been said to be a matter of public policy – Giannarelli is, with respect, distinctly orthodox in its approach in that regard. It is similar to other jurisdictions where the immunity has been upheld on public policy grounds for multiple reasons.
What happens in D’Orta, on the other hand – and this is particularly at paragraphs 25 to 29 – is that first of all those six or so factors that are referred to are effectively reduced to two; we would say effectively reduced to one, and I will come back to that in a moment. Secondly, there is very little, if any, weighing or balancing out of public policy factors, and thirdly, we get the emergence in the D’Orta Case of this, I submit, curious expression and that is the word “tenet” and this notion of relitigation which is certainly discussed in Giannarelli, and I took your Honours to the passages, is transmogrified, I submit, quite significantly in this decision in D’Orta.
We have said in our outline at paragraph 3.7, we have focused on some of the key points there, that is that there is a central and pervading tenet that controversies once resolved are not to be reopened except in a few narrowly defined circumstances. At paragraph 84:
To remove the advocate’s immunity would make a significant inroad –
on that tenet, and the conclusion is:
That inroad should not be created.
So the other of the two factors I mentioned – I said there were two – was the judicial processes and aspect of government. I submit, and I do not have the time to go through it, that when you look at the relevant passages about that this is really just – this relitigation tenet by a slightly different name and with a slightly different emphasis, that is, this idea of if you relitigate it has an effect on the standing of the administration of justice and the judiciary.
Finally, we get an emphasis particularly in paragraphs – this is in D’Orta – 66 to 69, and 81 to 83, on the sort of triumvirate of factors, or triage of factors, where there is a “paradigm case” – that is the expression used in paragraph 72, a “final result”, and then there are these other two situations of intermediate result and then the situation of an adverse costs order. But everything swings, as the plurality say, on the paradigm situation which is the situation of final result.
So that is a very brief summary of the difference in approach, but obviously the key focus in D’Orta is very much on this tenet. As we have said at paragraph 3.7 of our outline, this tenet which is fairly broadly framed that controversies once resolved are not to be reopened subject to exceptions and it is that clash, that inroad between an action against an advocate that is said to justify the immunity.
So their Honours conjure up – I do not mean that disparagingly – a picture of a tenet about relitigation which presumably has some boundaries – I will come back to that in a moment – and they then say, well, if that is the area of this tenet, this action against, I will say an advocate, makes an inroad into it and in paragraph 84 they say, well, that inroad should not be created because, well, as I will explain later, they do not really say why. So you have a rather opaque, ill-defined notion called a “tenet”. We do not know, I respectfully suggest - - -
KIEFEL J: Mr Reynolds, in the D’Orta decision at a much earlier point where the joint judgment is dealing with Giannarelli at pages 14, 15 – paragraph 25, in particular – it is said that there are really only two principal matters that are now considered to be relevant, arising from Giannarelli.
MR REYNOLDS: That is right.
KIEFEL J: The rest are peripheral. We are going to focus upon them and one can see that, as their Honours explain it, finality is the one that carries the day. Are you suggesting that, as their Honours there say, these reasons will seek to demonstrate the decision in Giannarelli must be understood to have regard to those two matters in particular finality? Are you saying that their Honours were wrong in D’Orta to have understood Giannarelli to say that?
MR REYNOLDS: Giannarelli – to quote your Honour the Chief Justice – is a multifactorial style analysis. As your Honour has just pointed out, there is a switch here – this is at - - -
KIEFEL J: There is a focus here.
MR REYNOLDS: A refocusing on to a couple of things. I have submitted, I hope respectfully, that this notion of judicial process as an aspect of government which is principally discussed at paragraph 31 and a couple of paragraphs following that, when you look at that and read paragraph 31, in particular, which does, I might add, mention public policy, that it is really just what one might call an aspect of this notion of finality that if you do relitigate in collateral proceedings things that have already been decided - - -
KIEFEL J: It is bringing public policy into a big frame, is it not?
MR REYNOLDS: Yes.
KIEFEL J: Then, finality is what makes it critical in the judicial proceedings as part of that large picture.
MR REYNOLDS: I submit the important thing is that we need, I respectfully submit, to focus on what they mean by “finality”. We have said at paragraph 3.7 of our outline that that is a key paragraph – that is, paragraph 34 – that there is this central and pervading tenet that controversies once resolved are not to be reopened and that those three propositions are fairly important to the reasoning.
That tenet has, if you like, an edge that slides into this notion of judicial process as an aspect of government. But we are really down, I suggest, on a fair reading of the plurality judgment, to one really important thing, that is, this notion of this tenet as I have described it at paragraph 3.7(i). What that means is that that carries a lot of weight in this analysis and what I am going to attempt to do is to try, with respect, undermine that and undermine the reasoning which supposedly supports it.
Your Honours will have seen that – before I get to a list of points which I will deal with as quickly as I can – a couple of things. First of all, as I think your Honour Justice Bell mentioned on the special leave, there is a decision of the New Zealand Supreme Court in Lai v Chamberlains which I expect many of your Honours will have read. That is, of course, after the D’Orta decision and it is, I respectfully submit, a valuable discussion of some of the difficulties with this particular tenet and I respectfully commend it to your Honours’ consideration.
The second thing is that when one looks at the detail of the way this rationale for the immunity, the reasoning underlying the immunity is put together in this decision in D’Orta, it is not something which appears on my junior’s reading of the transcript – we have not seen the written arguments – to have been really agitated in the argument that took place in D’Orta.
It is true that of course finality is one of the factors in Giannarelli which was thrown about as an important issue, but the particular analysis that your Honours find in the plurality judgment on this question was not, as we read the arguments, a matter that was – the aspects of it were not fully in play in the course of the argument. Put another way, what you are about to hear, I respectfully submit, is the first time that the reasoning in D’Orta has been exposed to argument on the floor of this court. The topic was touched on but not the various ways it has been put together in this judgment. That is the preliminary.
This is difficult for me but I will try to summarise these as briefly as I can and, to make it easier for my learned friend, I will number these points and try to move through them as quickly as I can. The first is that although the immunity is based on public policy notions, that is not the Court’s focus. It is, as we have discussed and as Justice Kiefel mentioned at paragraph 31, almost the whole focus of the reasoning is on this tenet and to this notion of an inroad, rather than on an assessment of public policy factors and a valuation of whether or not an action of this kind ought to be able to be brought as a matter of public policy. It is all about this tenet and it is all about the notion of an inroad – that is my first point.
The second is that the immunity is based, I submit, almost solely on that one factor – that is, the notion we have summarised in paragraph 3.7 – of an inroad on this tenet. I suggest that because that one factor necessarily bears a huge amount of weight, it is going to be difficult to justify the immunity on that basis alone and generally in earlier cases the approach has been to look at multiples and various factors. They have all gone by the by, so they say, in D’Orta, but we are really down pretty much to this one thing, a thing called a tenet, which – and I will come back to this – I submit is a rather unusual expression jurisprudentially. It is not a substantive principle apparently and it is not, on the other hand, I guess, just a general consideration that one finds, for example, embodied in the maxims that we know in the law.
FRENCH CJ: It is just being used to refer to the proposition that there is a high value attached to finality. I do not know that one needs to focus so heavily on the choice of that particular label.
MR REYNOLDS: Your Honour, it is important, I submit, for the analysis I am about to try to conduct to focus on whether it is a substantive principle or whether it is something different and, if so, how it differs from a mere generalised notion that there is a public interest in finality of litigation, which we see in the maxims or whether we are dealing with something else. But the use of that word, I suggest, is rather eye catching and I submit means that there must be further focus on what exactly is involved on that. They are the two preliminary points.
The next point, the third one is this - that this immunity is problematical because there are many cases on the liability of solicitors for negligent conduct of litigation which are still good law. The existence of that case law suggests that an inroad on this tenet is an insufficient basis for this immunity. I submit this is an important point. It is a point made by Justice Handley in Donellan v Watson (1990) 21 NSWLR 340 at about F. He said:
It may be necessary one day to consider how the public policy against collateral attacks on the merits of earlier decisions . . . is to be reconciled with the many nineteenth century decisions holding solicitors liable for negligence in the conduct of litigation -
The point that he is making there is that this has always historically been an advocate’s immunity. There have been plenty of cases and they are discussed by Justice Toohey in Giannarelli at pages 604 to 606 and in Rondel at page 265, plenty of cases where solicitors have conducted cases negligently and been sued. The action inevitably involved an assessment of what the result would have been if the solicitor had not conducted the litigation negligently. That is a clear infraction, obviously, of this notion of relitigation. If the basis of this immunity comes down to that then one has to explain away the availability even now of actions against solicitors of that kind.
Related to that is the fourth point is that no one would suggest that this immunity in D’Orta protects even all advocates or all litigation lawyers. There are things that the barristers at this Bar table could do in litigation which would be outside the immunity. Again, those actions necessarily involve and would involve relitigation, that is, working out how the result of the case would have been different but for that negligence.
Now, the key to this reasoning, as we have put at paragraph 3.7, is simply the statement that an inroad should not be created on that concept. That, without more, appears to be the fundamental point, that this terribly important tenet is so powerful that this particular inroad should not be made, full stop. The point is that in the two instances I have mentioned in points 3 and 4, it is clear that those inroads already exist, and one needs further reasoning other than saying there has been an inroad on that tenet to justify this particular immunity.
GAGELER J: What is an example of point 4?
MR REYNOLDS: We have to look at the test first of all, but let me put it this way - action by an advocate in the conduct of litigation, which was not intimately connected with the running of the case in court. That picks up the second flick in paragraph 86 of the test in D’Orta as a discrimen and says “Okay, move out of intimate into non-intimate”. In that area, there would have to be an analysis of – if, for example, I was sued for something outside the immunity, but within the conduct of litigation, then my client would show how the result of the case would have been different if I had not have engaged in that negligence, let us say, at an early stage of the litigation which was not intimately connected.
GAGELER J: Really, I am asking is there a reported case that illustrates that point?
MR REYNOLDS: Well, one would really just need to find a case, and I could provide a list of these, your Honour, of cases against barristers, which have been held to be - or solicitors - outside the immunity. As to point 3, there is a welter of cases.
GAGELER J: I understand.
MR REYNOLDS: If we move within point 4, I guess there is – if, for example, the result, because of the wider test in D’Orta the result in Saif Ali would be different in this country because that is about drawing up a pleading and adding in a party – sorry, I withdraw that. If that was outside the immunity and that was the cause of the loss to the client, that would involve seeing how that case against the party who was never joined would have been run and whether or not the client would have recovered in that situation but, your Honour, I would like to, if that is a matter that interests your Honour, to give your Honour just a list without adumbration of cases that would fall into that category, if I can be permitted to do so.
Now, the next point is point 5 and that is the ambit of the immunity specified in paragraph 86 of D’Orta does not correlate with this relitigation tenet. Your Honours have seen from page 560 at about point 2 in the Giannarelli Case that not only the immunity but also the ambit of the immunity must correlate with the underlying rationale.
The problem is that – if one takes this tenet which we have set out at paragraph 3.7 that would apply to almost all negligence in litigation. What that means is that the actual ambit of this test does not correlate with the reason, the core reason which is said to justify why because this notion of relitigation and the ambit of the test are not co-terminus for the reasons I have mentioned in points 3 and 4.
Point 6, which is an elaboration of that, is this. Further reasoning is required to justify the immunity in D’Orta other than what we have summarised, for example, at paragraph 3.7. Their Honours say at paragraph 84 that in inroad should not be made, or should not be created. Our respectful response is why not? We need some content to be given to that. That is the key question – why, or whether or not an inroad should be created.
Normally the focus of the public policy style analysis is whether an inroad should be created, whether an immunity should be allowed, whether an action should be allowed. That is the core question. Yet, the reasoning, in my most respectful submission, is exiguous on that key point. It would not, I daresay, be impossible for my learned friend to find other things that are referred to in the judgment. But, that core question which focuses on whether an inroad should be made is not, I submit, sufficiently justified by the reasoning in the judgment.
Point 7 is a very similar one and that is your Honours will have seen in point 3.7(i) that their Honours refer to a few narrowly defined exceptions. One of the points made by the New Zealand Supreme Court in Lai is that, I think subject to one exception, their Honours do not go into that issue and do not explore what are the exceptions to this particular tenet.
The point here is that there is not any reason as to why actions against advocates are not an exception to the tenet. It is really another way of putting the point that I have put at point 6 which is that there needs, in my respectful submission, to be some exploration as to what are permissible exceptions, what inroads should be made and why it is that this exception or this inroad should or should not be created. All we have essentially is a statement that there is this tenet and that no inroad should be created essentially, full stop. There needs to be additional reasoning, I respectfully submit, in order to justify the conclusion.
Eighthly, the arbitrary and capricious operation of the immunity, we submit, is exacerbated by the vagueness and uncertainty of its ambit. Your Honours already have heard me say that there are some actions against solicitors and for that matter against advocates that would fall outside the immunity, notwithstanding that they are caught by this relitigation tenet. That means that the operation of the immunity is relevantly to that tenet arbitrary and capricious.
This test in paragraph 86 of D’Orta, I submitted before, is vague and uncertain. The decided cases demonstrate that beyond doubt. I do not have the time to go through them, but I submit that that is clear. Arguably, a very large proportion of litigation work would fall within that tenet. There would have to be a line drawn at some point as to where the immunity begins and ends. But the drawing of that line necessarily will operate both arbitrarily and capriciously because there will be cases either side of the line that are covered by this notion of relitigation and yet only one half of them are actually caught by the immunity. That is number 8.
Number 9 is that this tenet must be stated very broadly for actions against advocates to come within it. One of the problems that besets the debate in this area, I submit, is just talking about finality without hunkering down and actually focusing on what the concept is precisely that we are talking about.
We have attempted a summary at paragraph 3.7(i) and your Honours will see that there is not any real content there. It is a notion of a controversy being resolved not being able to be reopened. Now, that immediately turns one’s attention to the sort of cases that are covered by res judicata – same parties, same issues, et cetera.
But this case against a lawyer after you have lost the case is very different: there are different parties; there are different issues; there are new integers of fact and law; the result would not change the result of the earlier case which would remain; and the analysis of the damages in the case law, for example, Johnson v Perez, shows that the analysis is much closer to a sort of loss of a chance analysis rather than actually saying what exactly would have happened at the earlier case, but rather what is likely to have occurred.
FRENCH CJ: Res judicata is one of a clutch of preclusionary doctrines, some of which have more precision than others including abuse of process.
MR REYNOLDS: The point that I would make relevantly is there is not any definition as to the exact width of this tenet but we do know that it must be very broad because if it was not broad it would not catch this case. So, but if it is that broad, that is, broad enough to catch this case, it is going to be broad enough to catch a massive amount of potential cases.
One could list virtually all of the cases, all of the civil cases that are referred to in Spencer, Bower and Handley on res judicata and look at every party that failed successfully to win a res judicata or issue estoppel argument but where the case was kind of relitigating similar issues and that would be within this tenet. Well, that suggests, I submit, the tenet is too wide and that a mere fact of an inroad into its periphery is insufficient to justify the immunity. Again, one needs some additional reason for it.
Tenthly, your Honour, I see the time but I respectfully suggest that I have only got about another five factors and probably my learned friend, Mr Bell, would like to know them before he has his repast.
FRENCH CJ: Yes, please proceed and finish.
MR REYNOLDS: I will not be much longer. I would estimate about five to six minutes. My next point is that the tenet is never defined, that is – this is 10 – its full ambit and operation. We know it is broad but the fact that it is undefined casts doubt on whether one can fairly say that any inroad on it should mean that the action is not maintainable. The broader and vaguer the tenet is, I submit, the less likely it is that one can say that any inroad into it means that the action is not maintainable.
Eleventhly, a conflict with what I will call the core of the tenet is not a proper basis for creating the immunity, because that core is necessarily, as I think your Honour the Chief Justice put to me, covered by the doctrines of res judicata, issue estoppel, abuse of process, et cetera, in civil cases. If those principles are offended, then they operate of their own force to prevent the relevant action and one does not need to create an immunity to deal with those situations. That is a big focus of the Supreme Court of New Zealand.
FRENCH CJ: That is the point I was making, is that at one end of the spectrum of those preclusionary doctrines, there is probably no greater precision than the general principle of which you are complaining.
MR REYNOLDS: Well, that really leads to my next point, your Honour, which is the twelfth one, and that is if one is talking here of a conflict between this action against the lawyer and the periphery of this tenet, that is, outside the substantive principles of res judicata, et cetera, then it is very difficult to suggest that without more, that would be a sufficient basis for the immunity.
It is so broad, it is so undefined, and we are assuming ex hypothesi there is no conflict with the core doctrines, and again, many, many cases would fall within this wide and undefined tenet. That again emphasises the need for further justification of this immunity other than simply by reference to there being an inroad on this tenet which is – I do not know, what, that wide, this wide? What are its metes and bounds? We know it is wide.
Thirteenthly – this is again a point made by the Supreme Court in New Zealand – the res judicata, issue estoppel, abuse of process and, if necessary, related doctrines give sufficient safeguard, I submit, against relitigation. We all know that these principles have evolved over hundreds of years to create rules of substance; substantive principles as to why relitigation cannot be permitted.
Those principles are sufficient protection, I submit, against relitigation. One does not need to have an immunity operating over and above that area. For example, your Honours have seen the Hunter doctrine that prevents an accused who has not been acquitted on appeal from running a case against his lawyer for having him convicted.
Fourteenthly, much of the reasoning – we have dealt with this behind this notion of relitigation – is that the notion of tarnishing of the administration of justice by reopening cases that have already been decided, I submit that that is not a sufficient basis for the immunity, and this picks up, I think, a discussion between me and your Honour Justice Nettle before about the interplay between the first and the last argument. I said I would come back to this; this is that point.
The result in the original case is not altered in these actions. I submit that given the difference in the issues – the different integers, the different parties, and the different appraisal on damages – there is little, if any, tarnishing that would occur even if there was a previous decision by somebody launching an action against their lawyer and saying that they lost a valuable opportunity to run a case that should have been conducted wholly differently.
Second of all, I would respectfully embrace what Justice Deane said in that passage from Giannarelli I took you to, which is that there is much greater tarnishing of the administration of justice if one deals with a case involving gross negligence by a lawyer and massive loss, and yet one has to
tell the client that he cannot bring an action. That, I submit, does tarnish the interests of justice.
Your Honours, there is the issue about orders. I have been heard about that. I thank your Honours for the extra time. Those are my submissions.
FRENCH CJ: Thank you, Mr Reynolds. The Court will adjourn until 2.15.
AT 12.51 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.14 PM:
FRENCH CJ: Yes, Mr Bell.
MR BELL: If the Court pleases. The Court has, I hope, our short outline of argument, which we have provided this morning.
FRENCH CJ: Mr Bell, I understand that there was an inquiry made of the Registrar in relation to the time. The Court is prepared to sit on, on the basis that I think you have allocated, by agreement, two hours, and the intervener will be 10 or 15 minutes, and then Mr Reynolds in reply. That might take us up to a maximum of a quarter to five.
MR BELL: Yes, I will go no longer than my time, and I will endeavour to be more efficient, if possible.
FRENCH CJ: We will assist you wherever possible.
MR BELL: I look forward to the usual assistance from the Court. If the Court pleases, I have referred to the opening outline. As my friend developed the argument this morning, it began as though it was really a contention of interpretation of the D’Orta test, and perhaps the suggestion that on the facts, this is on the other side of the line and it was a wrong decision on the facts of the existing test.
As the argument developed by about a quarter to 12 or so, the metaphorical leopard revealed its spots, because by then it became extremely clear that the submission is that the test – and I emphasise the word “test” – as identified in paragraph 1 of the plurality’s decision in D’Orta, and confirmed in paragraph 86 in the language of a test – and I will come back to the significance of that language – it became clear that the assault was both on the test in D’Orta and also, interestingly and importantly, on the application of that self-sown test in D’Orta to the facts of D’Orta. This was the submission which your Honour Justice Gageler, I think, was asking about; well, is the argument put that it is only decisions of the advocate, in the sense of true decisions of the advocate, taken in the heat of battle without the intervention or interposition of instructions, et cetera?
Now, that cannot stand with the Court’s decision in D’Orta for the reason identified, both in oral argument by the Chief Justice and Justice Kiefel, but also paragraph 91 of the decision in D’Orta because that makes it abundantly clear that the decision in question in respect of which the immunity attached was the decision not of the advocate but the client. It was the client’s decision, the Court said, to enter a guilty plea – and the fourth line of paragraph 91:
(here the client’s decision to enter a guilty plea at committal) which affects the conduct of a case in court –
et cetera. Of course, Justice McHugh, in whose judgment our friends place such store, was a party to the majority disposition in D’Orta. It was only Justice Kirby who dissented on the question of principle as to any immunity at all.
So, let there be no doubt that this is a front-on assault of a decision given almost exactly 11 years ago by this Court after two days of argument and full, we would say, consideration of arguments, many of which have revealed themselves again here which are not, in truth, fresh arguments. What the Court is asked to do is precisely what the Court was asked to do 11 years ago because if one goes to paragraph 85 of D’Orta, the plurality crisply stated the question at the end of paragraph 85:
Should the boundary of the operation of the immunity be redrawn?
That is the same question and the redrawing of it would require the Court, on our friend’s argument, to alter, to change the test; at its most extreme, to abolish the test, but on less extreme versions to modify the test, but still significant modification.
FRENCH CJ: Or otherwise paragraph 85 would presumably pick up contractual liability, at least based on an implied condition.
MR BELL: Yes, and there are decisions – not in this Court but decisions which have held it applies to liability under section 87 of the Trade Practices Act and so forth. In other words, it is not an immunity from suit for negligence, it is an immunity from suit in the requisite circumstances of the case. In paragraph 86, your Honour, we do unashamedly highlight the description in the second line of the test as a test and we draw attention also to the last sentence:
(We do not consider the two statements of the test differ in any significant way.)
Now, the reason why we emphasise those two references to the test is because the formulation of clearly stated tests is what this Court regularly does and we have collected in paragraph 5 of our principal written submissions any number of cases where the court self-describes one of its important tasks, the articulation of clear tests, and the formulation of legal tests is, of course, also of great importance for first instance and intermediate appellate courts and, ultimately, for consistent decision-making and for the ability of the profession to give clear and coherent legal advice.
So where what the Court is being asked to do is to change or, at one end, wholly abolish a recently stated test, that is a major step, and as we say, although the submissions of the appellants vary in the intensity of their test or from wholesale abolition to reformulation, they all require a reopening. Now, it is trite but trite propositions are often worth noting as a base for an argument but that is not something that should lightly occur and, we would submit, should not occur in this case.
Far more is involved in this Court changing a recently stated test than a pure exercise of discretion or a manifestation of a difference of opinion on the correctness of the current test. More is involved than that and that is reflected in the jurisprudence of the Court over its entire existence. Now, we have collected much of the relevant case law in paragraphs 49 to 51 of our written submissions. Your Honours will be, I am sure, familiar with many of those authorities, many which are, we would respectfully submit, very well encapsulated in what your Honour the Chief Justice said in Wurridjal v Commonwealth (2009) 237 CLR 309 at 352, paragraph 70, where your Honour the Chief Justice spoke of:
a strongly conservative cautionary principle, adopted in the interests of continuity and consistency in the law -
That observation, your Honour said that in the context of noting that it is an evaluative consideration of arguments in any given case but your Honour summarised or put epigrammatically really what is required, a strongly conservative cautionary principle underpinned by legitimate concern for continuity and consistency of the law and I think, in our written submissions, we also refer to a joint judgment of Justice Kiefel and Justice Keane where your Honours have identified those values as important elements of the rule of law.
Now, the only other authority on that proposition I would seek to take the Court to is the observation of Sir Owen Dixon in Attorney-General for New South Wales v Perpetual Trustee [1952] HCA 2; (1952) 85 CLR 237 at 244, point 4. This was a case involving quod servitium amisit. The question in that case, decided in 1952, was whether the Court should revisit its decision eight years earlier in Quince’s Case. His Honour Justice Dixon refers to that at about point 4 of the page. He said:
It is evident that the decision –
that is to say the Quince Case decision –
was reached only after a very full examination of the question –
We say D’Orta involved such a very full examination of the question –
It cannot be said that any compelling consideration or important authority was overlooked or that the decision conflicts with well established principle or fails to go with a definite stream of authority. It is a recent and well considered decision upon what is evidently a highly disputable question. The question stands by itself. The decision does not affect some wider field of law . . .
In my opinion the proper course to take is simply to follow the decision and apply it -
He thinks the appeal should be dismissed. Interestingly, he goes on to say had the matter been res integra he would have reached a different decision. But the application of the strongly conservative cautionary principle, mindful of the need for consistency and, ultimately, respect for the rule of law and respect for the role of this Court in the articulation of the common law, moved his Honour on that occasion not to give effect to his approach had the matter been res integra.
There is, of course, a distinction in this particular line of authority between constitutional decisions where the Court says that the need for caution is still there but is less significant a factor because what is being interpreted is the Constitution.
FRENCH CJ: Not least because it cannot be fixed up legislatively.
MR BELL: Quite. In paragraph 2 of our short outline, your Honours, we identify a number of the – again, to use Chief Justice French’s words – the evaluative style considerations which, we would respectfully submit, militate powerfully against any abolition or modification of the test and some of them are obviously and self-evident and do not require further elaboration but may I expand briefly on a couple of them.
The first one is covered in subparagraph (iii) of the outline. In that context, can I ask the Court to note paragraph 60 to 63 of our principal submissions and also for the tipstaves to provide your Honours with a copy of the slim bound volume, which we have headed “Respondent’s Supplementary Schedule of Legislative Provisions”?
Your Honours, the starting point for this particular aspect of the submission is set out in paragraph 61 of our principal written submissions where we refer to paragraphs 53 and 54 in D’Orta and we extract the relevant propositions, where the Court in D’Orta observed that in the period really since Giannarelli the legislative activity had not led to an abolition, notwithstanding the fact that there had been considerable legislative activity in respect of the legal profession.
So, the point was being made that this being a matter which – involving, as Mr Reynolds has fairly said, competing considerations of public policy of the kind which legislatures regularly, routinely, grapple, the Court said that is a significant point. What our submission today does is - - -
KIEFEL J: I think I am right in recollecting that the similar – a review was actually undertaken in England after Saif Ali and there was no difficulty found with the existence of immunity. So, in a way, it does not explain what later happened in the English courts.
MR BELL: Yes, but what I am going on to say – and we note this in paragraph 63 of our written submissions – that the Standing Committee of Attorneys-General expressly looked at this matter post-D’Orta.
FRENCH CJ: This is about – there is talk about legislative inactivity. In a sense, it is about executive inactivity. I think we had this kind of argument run in D’Arcy recently.
MR BELL: Yes. But, your Honour, one can have silence. One can just have a void where you do not know that the - - -
FRENCH CJ: This is the pregnant silence.
MR BELL: The matter was squarely addressed by the Standing Committee of Attorneys-General – make a reference to that in 63. But, your Honour, the point I am making – and I understand the force of what your Honour says about not putting too much weight on legislative inactivity - where the significance of our supplementary schedule of legislative provisions goes is that, in fact, we can point to legislative activity, not inactivity, legislative activity post-D’Orta which is consistent with the legislatures throughout the country, both the Commonwealth, the State and the Territory legislatures, in fact taking the existing immunity and extending it to all manner of tribunals, for example, throughout the country.
There is a plethora of legislation which adopts a similar legislative formula but the point of significance is this – it is really twofold. And just to explain the schedule, there is a summary table and then there are – we have numbered, I think, the New South Wales and the Commonwealth enactments and the other ones are noted but not numbered and then we have extracted the text of the numbered provisions. Can I indicate this to your Honour – I will just for the moment read these numbers onto the transcript – the legislative activity where legislation has been passed after D’Orta which recognises – and we would say tacitly endorses the immunity – is reflected in the legislation noted at the table at numbers 4, 5, 7, 10, 12, 14, 16, 19, 20, 21 and 22. That is all post-order, post-2005 legislation.
GAGELER J: Mr Bell, are you saying that this legislation speaks to the relationship between the legal practitioner and the client?
MR BELL: Yes. It gives the immunity to a legal practitioner appearing in these various statutory contexts. It gives the legal practitioner the same immunity that he or she would have in court proceedings. These are people appearing, for example, in ICAC and other tribunals.
NETTLE J: Is that not just the Cabassi v Vila immunity for in court statements and conduct?
MR BELL: There is no reason to think it would be so confined - - -
NETTLE J: Just that it sits in; appearing in.
MR BELL: Yes, but we would respectfully submit there is no reason to think it would be so confined, because the immunity we are talking about is an immunity which attaches to a barrister or a solicitor appearing in court proceedings. The predicate of this case is that there are proceedings on foot. This case is not dealing with a case of settlement advice before any litigation has been commenced. This is about advice once proceedings have been started. Two other points to note; one is - - -
GORDON J: Do you maintain your conclusion at the end of 63, i.e. that this bundle of legislation is:
a powerful . . . acceptance and endorsement by Federal and State Parliaments of the immunity –
MR BELL: Yes, we do, your Honour, because it was passed after a time when the Attorneys-General had addressed the question of whether the immunity should continue – received reports, received submissions, and yet it was passed. Your Honour, perhaps the coup de grâce, if there is a coup de grâce, in this particular - - -
FRENCH CJ: This is assuming this is a killer point.
GORDON J: We were waiting for it.
MR BELL: I understand, your Honour. Your Honours, in the Trans-Tasman Proceedings Act, which is - - -
GAGELER J: Is this the killer point, the Trans-Tasman Proceedings Act?
MR BELL: Your Honour, only for this reason – it is number 22 in the table. Under that Act, a New Zealand case, or its - - -
GORDON J: These are the last two pages in this bundle?
MR BELL: Yes. In section 62, one can have New Zealand proceedings being heard in Australia, and section 60 – this is on page 78 of the bundle – there can be New Zealand proceedings which are being heard remotely in Australia; the judge could be in New Zealand. Counsel can appear under this Act in Australia, but in the New Zealand proceedings. What this Act does – mindful of the fact that at the time it was passed, the barristers’ immunity with which we are concerned did not exist in New Zealand – the legislature says that in New Zealand proceedings, where the advocate is appearing in Australia, the advocate has the immunity which he or she would have if they were appearing in the Federal Court.
So that is a little bit different to simply saying, well, it is only, for example, as Justice Nettle put in House et cetera, that is acutely conscious of the fact that in New Zealand proceedings there is no immunity and the Commonwealth is saying that if you are an advocate appearing in Australia, albeit remotely in those proceedings, you have the immunity you would have as if you were appearing in the Federal Court.
GAGELER J: Mr Bell, is there anything in the extrinsic material for any of this legislation that suggests that these provisions are directed to the Giannarelli and D’Orta immunity?
MR BELL: No, not that we have been able to find, your Honour, and we looked. Your Honours, could I move on then with the submissions? That is one of the points in our paragraph 2 that we highlight. Points (iv) and (v) in a sense travel together. The point in (v) is a given. This Court has held that there is no prospective overruling, and the point in (iv) is to the effect that people have relied on Giannarelli and D’Orta for many years, and by people I do not just mean lawyers. I do not just mean lawyers in their insurance arrangements.
I do not just mean lawyers and insurers in the setting of reserves and the setting of premiums, et cetera. I mean any number of people, an unnamed number of people, who have not brought proceedings, who may have had proceedings that they could bring but have been advised in accordance with the stated law in Giannarelli and D’Orta that such proceedings are not available. There is another class, of course; people who have brought proceedings but have had their claims rebuffed by the application of the immunity.
Now, those people have all, it must be assumed, relied on this Court’s decision. When one thinks what happens if the immunity is lost? One can look at the damage that could be done – could readily be done for respect for the rule of law and, indeed, respect for this Court. A legitimate point could be made, well, all that seems to have changed is the composition of the Bench. Now, that is not an observation or a perception that is good for the rule of law.
The immunity, if it is offensive to public policy, in those circumstances can be addressed by the legislature. That has a number of benefits; one, it would be prospective; two, the kind of adverse impact – not to be underestimated – on respect for the rule of law would not be lost because the change would be through the people’s elected representatives; but thirdly, your Honour, for the kind of examples that are sometimes thrown up, the case of grossly negligent advice, the kind of argument the Court considered in D’Orta and Giannarelli, it is open to legislature in a nuanced way to say, well, if there is gross negligence that will not be excused by the immunity in much the same way that the Commonwealth and State legislatures say with respect to public servants you will be immune from suit so long as you acted in good faith in the discharge of your duties.
Examples of that kind of nuanced legislation, your Honours, are section 78A of the Public Service Act 1999 (Cth), section 61A of the Therapeutic Goods Act, a legislative control or regulation of an immunity conditioned by reference to particularly egregious conduct in those circumstances in a way. I mean this Court has, for example, eschewed adoption in other contexts of the notion of gross negligence as opposed to negligence but it is a concept which one sees sometimes in legislation.
Another example of legislative regulation of liability for negligent conduct is in section 43A of the Civil Liability Act where public authorities are liable for negligence but only insofar as their negligent conduct was so unreasonable that no similar public authority could have engaged in it. So, your Honours, if there is to be, in the context of the matter being fully considered in Giannarelli, revisited 11 years ago in D’Orta, if there is to be some reconsideration, not only can it be done by the legislature, but that is the appropriate organ to effect such change. Now, your Honours, we develop those arguments more fully in our written submissions and the cross-references are in the short outline, your Honour.
Now, what I want to do now is briefly respond to Mr Reynolds’ list of 15 points which he articulated. Now, I am not going to do it point by point because as we heard that list, many of the apparently discrete points were not discrete at all. They were, with respect, indistinguishable from each other or simply variations on a theme, so I am not going to work through point by point. But the first point we make is that there were not nearly as many points in support of the reopening as or reopening as he contended.
Secondly, many of the points he raised were directly or indirectly considered in D’Orta and Giannarelli and the reopening authorities make it clear that where arguments have been put and considered, this should not be an occasion simply for another person having another go, another counsel having another go with slightly different words but in substance the same arguments.
Now, some of the arguments in Mr Reynolds’ list which we identify as having been dealt with in D’Orta included the following; the notion of abuse of process as salve to attacks on finality. That was at the heart of the Court’s consideration in D’Orta because that was at the heart of the Arthur Hall decision and the High Court considered whether abuse of process was an appropriate or sufficient salve for the impeachment on finality.
Another one of his arguments was he said, well, what about the gross negligence cases. That argument was put in Giannarelli, as one might have expected, and was put in D’Orta, as one might have expected, and was rejected on the basis that the importance of the immunity outweighed those extreme cases, in the same way that attacks on judicial immunity have been rebuffed on that weighing of competing considerations.
The third argument that Mr Reynolds put was what about all the solicitors’ cases that Justice Handley referred to in Donellan v Watson. If there was one thing that D’Orta was indisputably about, it was that solicitors had the benefit of the immunity in circumstances falling within the rule. Donellan v Watson, a decision of Justice Handley, was before D’Orta and, of course, D’Orta made it clear that the solicitors had the benefit of the immunity when their conduct fell within the test in D’Orta.
The next point Mr Reynolds put which we say is just not correct – he said there was not really a consideration of the competing policy considerations in D’Orta. He said there was this undue focus on finality. Well, D’Orta was about whether the Court should ditch the immunity in its entirety and follow Arthur Hall - for example, follow the lead that was taken in Arthur Hall. The clear issue for the Court was should it follow that policy direction or should it follow the test in Giannarelli. In the context of that, their Honours – as your Honours know – reconsidered a number of the policy arguments and refined the policy argument they thought was of paramount importance, the question of finality. So, it is just not correct, as Mr Reynolds said, that there was not a weighing or a consideration of the competing policies at play.
The submission was made there was not really a consideration of where to draw the line. There was not a consideration of line-drawing. I have already referred your Honour to paragraph 85 where the plurality could not have been more explicit in saying what we are being asked to do is consider whether the line ought be redrawn.
Then there was reference to Lai v Chamberlains. It is correct that the Supreme Court of New Zealand had not given its decision at the time of D’Orta. On the other hand, the Court of Appeal – the New Zealand Court of Appeal – whose decision was upheld by the Supreme Court, i.e. the no-immunity decision, had been given and was referred to extensively in D’Orta. One sees that in paragraphs 25, 68, 71, 93 and 120.
Your Honours, we would respectfully submit, that the reasoning deployed by the Supreme Court in Lai was really an amalgam of the reasons that had commended themselves to the Court of Appeal, the New Zealand Court of Appeal, in the decision which was before this Court in D’Orta and reasoning taken up in Arthur Hall which, of course, was the principal focus of consideration in terms of competing case law.
So, with respect – although we concede that temporally the Supreme Court of New Zealand gave its decision after D’Orta - there was nothing, with respect, particularly fresh or new in that decision. As one might have imagined, the arguments which could, availably, have been put were put in Arthur Hall by very distinguished counsel and considered by extremely experienced law lords and they were put also by extremely distinguished counsel before a very experienced Full Court in this Court in D’Orta.
It was not as though the New Zealand Supreme Court identified for the first time out of the blue a suite of arguments that had not been previously considered, so that accounts for many of the arguments put by my friend in favour of reopening. The balance of the arguments he put, which I will just deal with briefly, we say are simply not correct. He suggested, although did not go to authority on this, that there was some major division or split of opinion in New South Wales, for example, as to whether settlements fell within or outside the D’Orta test.
That is not so, and if your Honours go to our principal written submissions in footnote 8, your Honours will see we have scheduled a large number of cases where the immunity has been applied to settlement cases or where it would have been applied had negligence been found. Now, to those cases, your Honour, which were – obviously these submissions were prepared, I think, in October last year – the decision on line 3, Stillman v Rushbourne applying the immunity to the settlement context has been upheld in the Court of Appeal, [2015] NSWCA - - -
BELL J: It was a dissenting judgment.
MR BELL: It was a dissenting judgment of Justice Basten, yes, we accept that, and, of course, we have referred to Kendirjian v Lepore as well. In footnote 9, where we have referred also to the application with reference to Biggar v McLeod, we have also referred to Chamberlain v Ormsby, another New South Wales Court of Appeal case, to which of course can be added Justice Harrison’s case, a decision in this Court at appeal book 55 and the Court of Appeal’s decision. So we do not accept that there has been some major split in the authorities. We have referred to the Alpine Holdings Case in Western Australia which was a strike-out decision, which we respectfully say was wrong, but we are not aware of some strong competing line of authority.
Not only has the decision n D’Orta been able to be applied in the settlement context, but very often – again, contrary to another argument Mr Reynolds put – it has been able to be applied in a summary or separate question context. In other words, it is not the case that the test adumbrated in D’Orta is difficult of application. It may be accepted, and the Court of Appeal in Bott v Carter, where five justices sat, accepted that there will be cases where the question of whether the advice given or the conduct in question was on one side of the line of the D’Orta test or the other is something which will need to go to trial because it will be a fact intensive question not capable of being crisply dealt with in a summary way.
However, cases such as this, such as Kendirjian, such as Stillman v Rushbourne, and any number of other cases had been able to be dealt with on a summary or quasi-demurrer basis, as this was, where the question is let it be assumed the facts are as alleged, would the immunity apply.
Now, that is important for two reasons. One, it answers the assertion unsupported that the current test is difficult to apply and therefore should be ditched. It answers that question but it is actually a reason positively in favour of the current test because if we are talking about immunity from suit it is important that there be in fact immunity from suit in the sense that matters can be disposed of summarily or quasi-summarily if they fall within the clearly stated test.
FRENCH CJ: The more broadly you construe it, the easier it is to apply. I am not sure that ease of application engages with the argument about its scope.
MR BELL: I think one of the arguments was it is vague and we certainly do not agree with that. But, your Honour, as with any test formulated by an appellate court, there will be cases which do fall at or near the edge and they may depend on the facts as they fall out or what I am really dealing with is the assertion that it is vague and difficult to apply. That does not, with respect, by reference to those authorities and if you ask the question, as the NZ Court of Appeal did in Biggar v McLeod - an important decision because it was a decision of the same court which articulated the Rees v Sinclair test, their Honours said, and particularly Justice Richardson said, that in a sense no conduct could be more closely or intimately connected with the conduct of proceedings than a decision, than advice as to whether or not to continue the proceedings. He regarded that as a classic example of cases not on the periphery of the immunity on the Rees v Sinclair test as stated but rather close to the centre of the test.
Mr Reynolds made some submissions we do not accept about Biggar v McLeod. He said it was not a faithful application of Rees v Sinclair, but if one reads the judgments - they are short judgments - Justice Quilliam agreed with both of the justices. My friend sort of conceded that Justice Richardson’s judgment was close to Rees v Sinclair. Justice Quilliam agreed with Justice Richardson but the first of the judges also referred to Rees v Sinclair and found, we say, without any difficulty that advice as to settlement fell within the immunity.
GAGELER J: Do you take such a broad proposition from Biggar v McLeod that any advice on settlement falls within the scope of the immunity?
MR BELL: That result was unpredictable or that result was not supported by the evidence, et cetera. I will come to develop that argument because our friends, even though we made this very clear in our written outline as a fundamental objection to the tinkering with the immunity by reference to this concept of settlement advice, settlement advice is not just of one character. You can have settlement advice which is not to settle and that takes you directly into finality and what we have called in our submissions the narrow sense of finality. There is a broader sense, which I am going to develop.
I just want to flag that argument and I did so, in answer to your Honour Justice Gageler’s question because, with respect, your Honour’s question was do you say all settlement advice falls within? One of our points is that settlement advice is not necessarily a uniform concept. Not all settlement advice is to settle and often it is not to settle.
GAGELER J: I am thinking about what I understand to be the agreed facts here where, on one reading, the agreed facts a settlement in principle was reached and announced to the court. Doubtless, considerations of how witnesses might perform and all sorts of factors might fact into the giving of such advice the negligence that is agreed to have occurred - - -
MR BELL: Well, agreed for the sake of the separate question.
GAGELER J: Is negligence, if you like, in the writing up of the settlement that had been reached?
MR BELL: No, with respect. A couple of answers - not in the writing up of the settlement, the argument is that you should not have given this advice to settle this case before this judge when you did.
GORDON J: Is that right, Mr Bell? Is it not au fait to advise of the consequences of the terms correctly, the effect of them – that is, subparagraph (d), in effect, a failure to tell me that if certain events happened, certain consequences would flow.
MR BELL: Well, 13b of the statement of claim, your Honour, advising the plaintiff to consent to a judgment against themselves, et cetera. All of this advice is advice which, according to paragraph 12, was given on the evening after the first day of the trial. The substance of it is, in our respectful submission, omissions - - -
GORDON J: About effect of the terms?
MR BELL: About the effect of the terms but also all in the context of advice to settle. So the complaint is, “You advised me to settle in these terms and you did not explain it to me”.
NETTLE J: You did not tell me that I would be liable for 3.4 if I defaulted. Is that it?
GORDON J: That is an element of - - -
MR BELL: That is an element of it.
NETTLE J: What is the other element? “You failed to tell me that I would be liable to 3.4 if I defaulted”. What else?
MR BELL: “You advised me that I should accept this offer and terminate these proceedings now” rather than – the counterfactual is rather than going through to trial where my worst case would be - - -
NETTLE J: 1.7.
MR BELL: No, 1.8 something, plus costs, et cetera.
GORDON J: Sorry to be difficult – is that right in relation to paragraph 12?
MR BELL: Yes, your Honour, because the loss is, if one goes to paragraph 14 - - -
GORDON J: .....admits the 1.8 is going to be deducted from the loss claim in paragraph 14.
MR BELL: Yes, but 1.856 is – the guarantee was $1.5 million. By the time of the trial, the demand had been made – the time for payment due – and the reason why the bank brought the proceedings was because there had been a demand and it had not been honoured. Interest had accrued, et cetera, and there was an increasing and ever-growing liability, plus an enforcement costs liability which would include the costs of the proceedings. There was advice to compromise these proceedings at that point in the trial.
One of the points which has not been really addressed, and which is part of our argument – again, I want to develop it in a little bit more detail – even when the advice is to settle and that advice is taken, whether there is a consent judgment or not, very often as a critical integer of the advice will be an assessment about how this pending trial is going to play out in front of this particular judicial officer if it is not terminated at this point.
What we will seek to develop as some of the highly undesirable consequences for the administration of justice that would emerge on the subsequent negligence trial where the barrister or the advocate says, for example, “I gave this advice which is impugned, because I formed an assessment that Judge X had particular characteristics, or had conducted the case in a particular way that I thought this was going to be the outcome”, that will become, in the subsequent negligence case, justiciable issues, whether Judge X either had those particular characteristics, or whether he or she had in fact conducted the case in a particular way to that point, or whether the advocate had a reasonable basis for thinking Judge X had those characteristics, et cetera, and they were legitimate matters to take into account in giving the settlement advice.
So whether you have actually a reasoned judgment or not the notion that the judge will not play some sort of role in the subsequent negligence proceedings is fanciful. Any competent advocate advising on settlement will take into account his or her assessment of how a particular judge hearing the case will dispose of it, and that assessment - - -
FRENCH CJ: That means that there is no difference then between the case where, as in this case, you have a consent order with some noted contractual arrangements, and a case in which there is a simple discontinuance and it is all in a contract.
MR BELL: There is a spectrum, your Honour. At the far end of a spectrum is where the advice is not to settle and there is a reasoned judgment. Then one comes to the advice to settle which is taken. You then have a number of possibilities. As we pointed out and Mr Lancaster has expanded in his written submissions there are any number of cases where, although the judgment is a form of consent order, it requires a measure of judicial approbation. That is a subset of cases.
Then there are cases where – and, perhaps, this is earlier on the spectrum – where, although the judge does not participate in the sense of approve settlement, a judge has encouraged the settlement, either formally through the procedures for compulsory mediation, et cetera, which include in Western Australia and Victoria judges acting as mediators either in formal encouragement or informal encouragement situations – a witness has been cross-examined, for example. The judge says in coded language would you like some time to take some instructions from your client about the future conduct of the case, et cetera.
Judges do play a role at differing levels of formality and degree, even in litigation which is resolved without even a consent judgment. That is why when one identifies the ultimate rationale through the immunity and the administration of justice, one of the reasons why we say the Court should not tinker with the immunity. I will develop that. Our friends’ submissions contemplate, after the immunity is gone, judges being called in subsequent negligence cases.
GAGELER J: They cannot be.
MR BELL: They can under the Evidence Act. They can be compelled. They cannot be called under the Evidence Act in the case in which they sit, in the instant case. They cannot be called about their conduct. But on this hypothesis, that is the first case, that is the case which is resolved. That proscription under the Evidence Act does not apply to subsequent litigation. Judges can be compelled in subsequent litigation with the leave of a court and that is under the Evidence Act. This is part of the - - -
KIEFEL J: Compelled to give evidence about what, though?
MR BELL: Your Honour, I want to develop this because one of the really important considerations in D’Orta was the skewed consequences of the subsequent negligence suit. We point to that. We point to this question – can the judge be called, can the judge’s notes be subpoenaed? There is no restriction in the Evidence Act. The Evidence Act contemplates that with leave judges may be compelled. The section is section 16 of the Uniform Evidence Act. Our friends’ submissions and their reply submissions draw attention to that fact. Another one of the - - -
GORDON J: One of the cases on the spectrum to which you have not referred is what I thought paragraph 12 was addressing and that is where you have a consent order which is entered and on its terms reflects an agreement but which is explained negligently to the client so that the client agrees to it on a mistaken basis or, to put it more neutrally, agrees to it because he or she has omitted to have had explained to them particular aspects of it.
MR BELL: Yes.
GORDON J: In that instance, none of those complaints about which you refer to would arise because the judge would not be called.
MR BELL: No, but let that be accepted, your Honour. But, when one looks at the other particulars of negligence in this case, the positive advice to consent to judgment – that could have been because, for example, after the plaintiff had been cross-examined on their unconscionability - - -
GORDON J: That is not what paragraph 12 says, Mr Bell.
MR BELL: Pardon?
GORDON J: It would not make any difference if the judgment in favour of the bank was for 3.4 million.
MR BELL: Your Honour, if the advice was to consent to this judgment which was a better deal than would have happened had the case run to finality, and let it be assumed – take a classic situation of a guaranteed case where the guarantor has put up an unconscionable conduct argument, has been cross-examined and the advice says in front of this judge you will lose. That judge is not going to accept this, that or the other.
NETTLE J: Mr Bell, I understand that but none of your particulars of negligence or now this so-called statement of facts is to that effect. None of them is “You told me that this was a better deal than I could possibly get by running to a verdict”.
MR BELL: I think subparagraph (b), your Honour, of paragraph 13 of the statement of claim on page 34 of the appeal book, for example.
NETTLE J: Would not result in 4 million? Is that not failing again to bring the 4 million default to attention?
GORDON J: One of the admitted particulars of loss which is deducted is the 1.85 million. There is a minimum already set. We know what the minimum or the maximum of the liability could be; it is agreed between the two of you that but for, as I understand the argument, the negligence, the maximum liability would have been 1.8. That is an agreed particular.
MR BELL: Well, it was - - -
GORDON J: This is the problem with this, Mr Bell, it has come up in this way but that is what we are stuck with.
MR BELL: Well, if one looks at (j) for example, Justice Nettle and Justice Gordon:
Failing to advise the first plaintiff . . . that they should refuse to consent to a judgment against themselves for an amount which they did not owe.
NETTLE J: That is the 4.39 million again, is it not? Everyone understood, did they not, that it was 1.75 or 1.8 plus costs if it went to judgment - - -
MR BELL: Well, no - - -
NETTLE J: - - - but this agreeing to default got them time to pay.
MR BELL: That was part of it. There was a larger claim for wrongfully dealing with securities with an unliquidated damages claim as part of it. On the guarantee though there was accepted that there was – what the figure was at the particular time. So, your Honour, one of the points we make in our submissions is that for causation in a sense to be established here, and this is the point Chief Justice Bathurst made, the court in the subsequent negligence case will necessarily have to conclude that the judgment given, albeit by consent, should not have been given, and that is really the premise of paragraph 14. That is how you get to - - -
KIEFEL J: Or, putting it another way, but for your negligence it would not have been given.
MR BELL: Yes.
KIEFEL J: But that is not the same as saying “should not”. That is the difference between a wrong judgment and one that results from negligence.
MR BELL: Yes. Now, your Honours, could I return to the structure of my - - -
FRENCH CJ: Just as a matter of detail, Mr Bell, the consent order, the copy that we have sealed and it is signed off by a deputy registrar did the trial judge actually have anything to do with it? Was it done under the Rules?
MR BELL: Our understanding is that consent orders were handed up in court and I think that the way it would normally work is that the judge would say the orders can be entered and then the solicitors go to the registry and the order is entered - - -
FRENCH CJ: All right.
MR BELL: I do not think the registry can enter a judgment without a judge first authorising the entry of those orders - - -
FRENCH CJ: Consent order, yes.
MR BELL: That is not just a pure administrative act that requires the interposition of the judicial officer, if that is how the parties choose to structure their settlement. I accept there can be cases where parties agree by contract or do the settlement without the formality of a court order and what I wanted to develop though and which is what I am coming on to really, is this notion that finality as used, as the concept of finality and the important concept of finality in D’Orta, is about the non-reopening of controversies once quelled and there are more than one way by which a controversy can be quelled.
It can be quelled, of course, by a reasoned judicial decision. It can be quelled at the other end of the spectrum by a private agreement. In between, it can be quelled through the encouragement of the judiciary, either formal or informal and it can be quelled subject to the approval of the judiciary in the large range of cases that Mr Lancaster draws attention to in his submissions.
Could I just go back to the point your Honour Justice Nettle and Justice Gordon were raising with me? There is also a subparagraph (o) of the particulars to paragraph 12:
Failing to advise the first plaintiff and Lord not to sign the Consent Orders.
There are many particulars but a number of them go directly to the point that you should not have advised us to settle these proceedings. Now, your Honours, although I have gone on some tangents and foreshadowed where I am going, what I have certainly sought to do thus far is to put to your Honours what we respectfully submit are powerful arguments against reopening but, your Honours, another argument against reopening is the substantive argument; that is to say, D’Orta was correctly decided and it is soundly underpinned and those sound underpinnings apply with equal force to context of settlement advices.
Now, we have a number of arguments here. The first is this, our friends’ argument, perhaps more particularly their written argument than their oral argument, illegitimately conflates a clearly stated test with one, but not the only rationale advanced, supporting the immunity, and that is the point we make in paragraph 5(i) of our short outline and which is developed in paragraphs 13 to 18 of our written submissions.
In our submissions we illustrate the point of conflation of the test on the one hand and the rationale on the other hand, or as Justice Leeming in the Kendirjian v Lepore decision, [2015] NSWCA 132 at 52 to 56, paragraphs 52 to 56, as Justice Leeming put it, conflation of principles and rules.
We illustrate that conflation by reference to the test for legal professional privilege; that is, a test which was originally stated by this Court – of course, it has been overtaken in some jurisdictions by the Evidence Act – but as stated at common law by this Court, it was a test which could be applied. It had a rationale. Its rationale lay in the trumping of the value or public policy in citizens being able to freely seek legal advice and have confidence that they could do so with confidentiality – the trumping, by that value, of the competing policy value of the courts having full access to relevant information for the purposes of disposing of proceedings.
When that test is applied, the courts do not engage in a consideration of whether, on the facts of this case, the particular person’s access to his or her lawyer was more important than the court having access to this information for the disposition of this proceeding. That is the larger policy rationale which undermines the existence of the test, but as applied from day-to-day, what is applied is the test, not the rationale.
Another example, if I could draw from an area closer to my heart or experience – the Spiliada test in England, the “more appropriate forum” test. That is a clearly stated test; is there a more appropriate forum than England in which to hear this case? The rationale of that test, as identified by Lord Reid in The Atlantic Star and Lord Goff in Spiliada, was a notion of international judicial comity; a notion that, if proceedings are in England which are more appropriately determined elsewhere, English courts should stay the proceedings.
The point is that in the application of that test in any given case, the court does not ask whether comity will be advanced on the facts of this case. It looks at the test and says “is there a more appropriate forum? If there is, we will stay the proceedings in favour of that forum”. The argument being advanced against us is an attempt to work into a clearly stated and clearly workable test – either to work into or supplant as the test – a test stated in terms of the finality rationale.
The great irony of my learned friend’s submissions is he spent most of his time immediately before lunch saying “what is this tenet of finality? It is loose, it is vague, et cetera”, and yet, at least according to their written submissions, it is that concept they would want to see incorporated or accommodated in the test which has to be applied in cases by judges at first instance in the District Courts, in the County Courts, in the Supreme Courts from time to time in these negligence cases. That is our first answer to an aspect of their argument.
The second substantive point is that the appellants’ whole argument based on finality is, with respect, predicated upon an unduly narrow conception of that notion which is not supported by D’Orta. This, we would respectfully pick up – the terms of the question your Honour the Chief Justice put to Mr Reynolds, which, with respect, he did not answer. Your Honour’s observation was “is finality a wider concept than correctness?” It is a wider concept, and that is the point made in paragraph 8 of our oral outline, and expanded on in paragraphs 20 to 24 of our principal written submissions.
Can I make that point good, your Honour, by taking you very briefly in D’Orta to paragraph 34? I think Justice Kiefel drew Mr Reynolds’ attention to the opening words of paragraph 34:
A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances.
That observation, we say, applies equally to controversies resolved by way of settlement, including judicially encouraged or judicially approved settlement. The other passage, your Honour, is on page 20 at paragraph 45, and the opening words there:
the central justification for the advocate’s immunity is the principle that controversies, once resolved, are not to be reopened except in a few narrowly defined circumstances.
We make the point in our written submissions, your Honour, that by reference to Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502 at 508, the parties’ antecedent rights merge in a judgment of the Court. There was a judgment of the Court in this case in which the parties’ antecedent rights merged. So finality in the broader sense entails the non-reopening - - -
KEANE J: Mr Bell, in relation to a consent order is that right? Is it not the case that it is one of the peculiar features of a consent order that it can be enforced either as a contract or as an order of the court?
MR BELL: But that would be a new contract or, as your Honour said, a new charter of rights, but as a judgment there is a merger of the previous rights and that is the result of Chamberlain, that is what Chamberlain holds. So unless the consent order is set aside, one has that merger, that estoppel or merger there.
Now, your Honours, I made the point that the degree of judicial involvement sits on this spectrum. One can have at the far end involvement when the judgment is given by a judge to the encouragement of settlement by a judge, that being done formally or informally, to the formal approval – when I say the formal approval, approval the degree to which – and the Court gave an important judgment on this matter last year - to agreed penalties. The judge still plays a role in all of that, albeit with deference to the parties’ agreement in that case as to penalty and I will not trench on the area to be covered by Mr Lancaster.
Now, your Honours, we seek to work through the various ways in which finality in this broad sense would be undermined by modification or abolition of the test to exclude advice with regard to settlement in the course of proceedings in paragraphs 22 to 24 of our principal written submissions, and what I wish to particularly draw attention to are the matters in paragraph 23 where we highlight the observation in the plurality in D’Orta at 45 of skewed litigation. This is bound up with an argument about incoherence, that there was not in D’Orta and there is not in this case any contention that the immunity of witnesses and the immunity of judges should be affected or interfered with.
That skewed form of litigation, being the subsequent negligence suit postulated by the plurality in paragraph 45 of D’Orta, we submit would be particularly problematic where settlement has been reached for the reason, as common experience teaches and as I have already noted, settlements are almost invariably influenced by not only the performance of witnesses but also the performance or perceived performance of the judge.
So that the punitive subsequent negligence trial will necessarily involve a revisiting of the already quelled controversy and, typically, will involve a question of how would this have panned out had it not been settled because we are dealing now with cases where there has been a settlement and, ex hypothesi, no final judgment. Chief Justice Bathurst said, at appeal book 94, paragraph 41, in this case, which is the point we also make in paragraph 24, the claim against a lawyer for negligence, settlement advice resulting in a judgment, necessarily entails the proposition that the judgment should not have been given.
Your Honour, the notion of skewed litigation, which was an important aspect of the plurality in D’Orta in paragraph 45, and which is just left untouched by the appellant in both their written and oral submissions, is even more pronounced when one has regard to what they say in paragraph 9 of their reply, namely, they contemplate a situation where a judge may be compellable, as the Evidence Act seems to contemplate, and this is compellable in the subsequent negligence suit.
That gives rise to these possibilities. In a case where the advocate says, as part of his or her defence, “I gave this advice to settle because I thought Judge X had taken a particularly negative view about a particular witness and I thought Judge X had a reputation to favour employers”. Or “I thought and factored into my settlement advice that Judge X took a notoriously long time to deliver his or her judgments and, in the meantime, you might go broke”. Or “I took into account that Judge X was not experienced in this area”. There are any of those possibilities, which are not, with respect, far-fetched considerations.
In the subsequent negligence suit, according to the appellant’s submissions, the judge may be compellable. What is to happen? Are the judge’s notes to be capable of subpoena? Is the judge able to be examined, for example, about what he or she thought of the particular witness and how they had performed. Two, test the reasonableness or otherwise of the advocate’s view as to the merits or otherwise of settlement.
Is the judge to be asked why he or she has never found against the Government, or why he or she has a reputation for favouring defendants in personal injuries cases, or husbands or wives in Family Court proceedings? This is the sort of consequences of this skewed litigation. Either it can be done, in which case the advocate gets a fair trial because they may be all legitimate aspects he or she took into account in giving the settlement advice, or it cannot be done and there is the skewing of the trial and the incoherence of the law in this area which the Court thought was important in D’Orta.
GORDON J: In relation to this skewing, has that been the experience of Canada and New Zealand?
MR BELL: Your Honour, in England – and I will take the Court to a decision in Moy where Lord Carswell – where after Arthur Hall, where settlement advice was litigated up to the House of Lords and, in a sense, the deed was done, Arthur Hall had decided there was no immunity - but Lord Carswell talks about the negative effects of advocates being sued in respect of their settlement advice – the chilling effect on the giving of frank advice, for example.
In England, in a case called Jones in the House of Lords, one can now sue expert witnesses. This is, in a sense, the unpicking of what this Court in D’Orta thought was skewed litigation. That has all sorts of costs and consequences for civil litigation in this country and the administration of justice. The argument that I am putting about the judge, calling the judge in the original action is, with respect, compelling.
GAGELER J: Have you looked at section 129 of the Evidence Act?
MR BELL: Yes, your Honour. They are the criteria for the grant of leave which are referred to in section 16.
GAGELER J: Now, it is exclusion of evidence of reasons for judicial decisions, et cetera.
MR BELL: Yes, but they are contemplating – that is the.....point from evidence lecture days. That is saying you cannot rely on a judgment in some other proceedings to prove a fact that you would otherwise have to prove in your case. That is, with respect, what that section is dealing with. Of course, in the case we are postulating, the settlement, there is no decision in play.
Can I deal with another aspect of the incoherence argument that closed? It closed from this point, that our friend’s argument, at its narrowest, would involve this anomaly being created that negligent advice not to settle would remain within an immunity based on finality because negligent advice not to settle ex hypothesi which if taken, will result in a reasoned judgment. In the subsequent case, the argument by the advocate will be that that argument was – that decision was wrong. Nobody could reasonably have expected that decision. Her Honour Justice Gaudron said, well, are there cases like this, are there cases - - -
GORDON J: Yes, but I asked you whether that had been their experience, that is, practically whether or not judges have been called to give evidence, practically whether it was required that that position would be adopted despite the provisions of the Evidence Act.
MR BELL: Well, in Australia - the appellant contemplates that would happen. All I am doing is to point out that it would be entirely reasonable and legitimate in the subsequent negligence case for the advocate to expose his or her reasoning and there may also be a problem with section 131 of the Evidence Act about the confidentiality of settlement advice. There may be a problem about that. But what I want to refer your Honours to, if your Honours could go to our written submissions, footnote 30 on page 8. We set out three or four lines from the bottom of footnote 30 an extract from and English High Court decision, West Wallasey Car Hire v Berkson:
He -
That is to say the advocate sued for negligent -
and everyone else at court, apart from the judge, considered the point a bad one and that he had arguments to defeat it . . . However, since the learned judge found the case otherwise, it is necessary to add that in my judgment, Mr Pugh is ‘not answerable for error of Judgment upon points of new occurrence or of nice or doubtful occurrence’.
Now, in the case where the advice is given not to settle and a judgment occurs, one is squarely within the centre of the D’Orta principle based on finality and on the narrow view not undermining reasoned judicial decisions. So that is how that arises, but I am focused on the anomaly. One cannot just speak about settlement advice because surely the common low ought not to have as a discrimen a point of difference whether the advice is not to settle as opposed to to settle and surely the discrimen cannot turn on whether the client takes the advice or not - that is, a kind of consequential incoherence that this Court has said in related contexts the evolution of the common law does not favour or support.
We have, your Honour, developed that point more fully in paragraph 29 of our principal written submissions and your Honour, the decision of Moy v Pettman Smith [2005] UKHL 7; [2005] 1 WLR 581, Lord Carswell - and this is, if I could put it colloquially, after the horse had bolted in the sense that this is post Arthur Hall, but this is a case where the trial judge in the negligence suit said there was no negligence in the settlement advice, the Court of Appeal said there was, the House of Lords said there was not and what Lord Carswell said at paragraphs 59 and 60 was to express concerns about the operation of this lack of immunity, in this context, stifling:
advocates’ independence of mind and action in the manner in which they conduct litigation and advise their clients.
So just going back to the dichotomy I have drawn, advise the client not to settle, you have immunity; advise the client to settle, no immunity. One can imagine nervous advocates saying, “I’m not going to go there. I’m not going to advise my client to settle.” In circumstances where they currently do and can and, indeed, the policy of the law is to encourage settlement, that policy is partly underwritten by the confidence an advocate can have that that advice, which takes into account all those forensic considerations of the kind I have mentioned, including in regard to the judge and witnesses and the like, can be issued frankly and regularly.
His Lordship referred to the decision of Justice Anderson in the Ontario High Court and at the foot of paragraph 60 on that page he referred to defensive advocacy about the course to be taken and over the page, endorsing what Lord Justice Brooke had said in the Court of Appeal:
it would be unfortunate if they felt that they had to hedge their opinions about with qualifications. It would be equally unfortunate if another effect of the same syndrome were to be an abdication of responsibility for decisions relating to the conduct of litigation and a reluctance to give clients the advice –
Now, that policy consideration, your Honour, was regarded as irrelevant or not irrelevant by this Court in D’Orta. Even though, as we know, some of the points made in Giannarelli did not continue to find favour with the Court in D’Orta, this point about the negative impact on advocacy did. It is paragraph 29 where the Court said, while we do not consider it of:
determinative significance . . . That is not to say, however, that the significance, or magnitude, of such effects should be underestimated.
My point is that the experience, because there are various assertions made by people in favour of abolition of the immunity - there are no consequences, it is all a beat up, it is all “thin end of the wedge” argument - one can legitimately read the observations by Lord Carswell in Moy as observations of regret as to an adverse consequence, an observable adverse consequence, or a plausible adverse consequence as a result of the House of Lords going down the route it chose to go - - -
KIEFEL J: It may simply be that it is, in the scheme of things, rather early days to be saying what the effects are and that might be a reason against reopening at this point.
MR BELL: It may be. I take your Honour’s point but what one tends to find though is that those in favour of the abolition say there is no evidence of this but these are early days and I point to Moy as an example. I point to Jones and the attack on the immunity of witnesses and that is a whole separate debate but the point in D’Orta made by this Court and equally made here, dealing with this piecemeal is not satisfactory.
FRENCH CJ: But you would accept what is said in D’Orta, that these considerations do not provide support in principle for the existence of the immunity?
MR BELL: What that paragraph says is not determinative but it is - - -
FRENCH CJ: Further, do not provide support in principle for its existence.
MR BELL: But unlike other factors which the Court really said were not good arguments, this is an argument the Court said was of some significance, not determinative significance. The point your Honour makes I would accept of course, if this were the only argument I was putting in support of the immunity, but it is there and supplements this notion of finality in the broad sense.
KIEFEL J: Could I just make this observation. In relation to your outline of argument you do not seem to take up how we are supposed to deal - or how the Court of Appeal viewed this particular case and the application of the test in this particular case and you only deal with it in your written submissions in one paragraph, in paragraph 74. You do talk about what the test – you discuss the test at the beginning but that is more in the context of conflating the notion of the basis for the test than the test itself.
MR BELL: Your Honour, I think paragraph 6 of our short outline, which does refer to 74 but also refers to paragraphs 8 and 9 of our substantive – our principal outline.
KIEFEL J: Speaking for myself, I am not entirely clear. How do you say what was said at paragraph 86 of D’Orta applies in this case?
MR BELL: Paragraph 86?
KIEFEL J: Yes. How does the advice out of court lead to a decision affecting the conduct of the case in court?
MR BELL: It was the decision which led to, in a sense, the termination.
KIEFEL J: That is all it has to be?
MR BELL: Yes. But, your Honour, perhaps I should take your Honour, if I may, with respect, to that particular passage in Biggar v McLeod at page 14. I should say that both Justice Harrison at first instance and the Court of Appeal agreed that – and there are other cases – the effect that the giving of advice as to settlement – it is page 14 in Biggar v McLeod – or perhaps beginning at the bottom of page 13 – reference to:
Rees v Sinclair established that pre-trial work is sufficiently connected with the conduct and management of the cause if it involves a preliminary decision affecting the way in which the cause is to be conducted when it comes to a hearing. It follows, a fortiori, that the advice given by a barrister as to the settlement of a cause during the course of a trial and the settling of the terms of a compromise –
The setting of the terms of a compromise includes an assessment of how that trial is going in front of that judge at that point of time at which the advice is given:
must attract immunity. It is intimately and immediately connected with, and involves the termination of the litigation. In such a case it is not simply that there is a temporal connection between that work and the actual trial itself. The giving of advice as to the compromise of proceedings, involving as it does the question of their continuation or termination, is an inherent feature of the conduct of the cause by counsel.
Then he goes on to say – and this is the point I have been developing:
And when a settlement is reached in the course of the trial itself, the compromise must surely be influenced by the barrister’s assessment of the way the trial is going; how the evidence has come out; what admissions have been made; any indication the trial judge has given of his thinking; and so on. In such a case it seems to me patently unrealistic - - -
KIEFEL J: You could not apply that as a generality, surely, not the least because in a case like this nothing has really happened much. The facts are in very narrow compass. There is no assessment. The problem with statements like this is that there are surely all these things involved in a barrister’s advice. It might be a purely commercial decision and the barrister knows that the parties are looking for a way out and they have certain instructions. All I am saying is I am not sure that a statement of such generality can be applied to explain or give effect to a test.
MR BELL: I hear what your Honour says. This Court also in D’Orta at paragraph 45 – and I am not shying away from what your Honour said – referred to as a relevant matter about four lines from the bottom:
If those immunities remain, it follows that the re-litigation could not and would not examine the contribution of judge or witness –
What Justice Richardson is talking about in Biggar v McLeod is the role that a judge might contribute to a settlement. Now, I accept that there may be cases where there is not much contribution, as indeed, your Honour, may have been the case in D’Orta. Do not forget that the key fact in D’Orta was the decision to plead. That is before the defendant had given testimony or gone into a box.
KIEFEL J: But I think that the way Justice McHugh discusses it actually points up a somewhat more nuanced approached. What might be, and what I am trying to point to and what is said at paragraph 86 of D’Orta, is whether or not the Court is talking to simply an effect on an outcome by the decision, an outcome or actually what occurs within the case itself which results in the outcome, and the more nuanced approach is seen in the plea because the plea affects sentencing and the earlier you give your plea the conduct of proceedings thereafter is actually affected. Now, it may not be seen in the same way in relation to a settlement.
MR BELL: But, your Honour, the difficulty, with respect, I have with that observation is that it is difficult to square with the decision in D’Orta. The giving of the plea at an early stage may have not in fact been influenced by anything that the judge did or any view - - -
KIEFEL J: No, but the point Justice McHugh makes is that in the context of a criminal trial and with sentencing to follow, the earlier the plea there is actually going to be an effect on sentencing. It will affect the future conduct of the balance of the proceedings.
MR BELL: Yes.
BELL J: I think also his Honour draws attention in the opening sentence of paragraph 166 to the distinction between criminal and civil proceedings when his Honour then goes on to exempt from the immunity that he joins in the majority conclusion with respect to, but he exempts negligent settlement of proceedings.
MR BELL: Yes. Well, your Honour, one does not find that distinction drawn in the plurality.
BELL J: No, one does not, but the question is when one goes to the test which you have described as being in clear terms, on a reading Justice McHugh is not seeing himself as outside the four walls of that test.
MR BELL: Well, take Giannarelli. There was no subsisting decision in Giannarelli. The subsisting decision had been swept away. There was still found to be immunity for the original, allegedly negligent, advice.
BELL J: But again, one comes to the possible distinction for reasons of policy between criminal proceedings and civil proceedings.
MR BELL: With respect, your Honour, one does not find a jot of support for that distinction in the plurality, with respect, or Justice Callinan’s judgment, for that matter.
KIEFEL J: Speaking for myself, I was not interested in the distinction between criminal and civil so much as the example that Justice McHugh gave. It focuses attention, perhaps, to the words “affecting the conduct of a case in court”.
MR BELL: Yes. Your Honour, we have tried to deal with D’Orta and what we say is actually quite a close analogy between a consent judgment and the plea in D’Orta in paragraph 44 of our written submissions. If I could draw your Honours’ attention to that – so the court will act on such a plea when it is entered in open court by an accused of full age, et cetera, in exercise of a free choice such that there is then no further proof required. Further judicial decision-making is required in order to sentence the accused, but just as further judicial decision-making may be required in some cases as to settlement, for example, the assessment of costs; how costs are to dealt with following a settlement, calculation of interests – or to that, your Honour Justice Kiefel’s example to Mr Reynolds, where there has been a settlement of an aspect of a dispute. The point is that on the question of guilt, the plea is it. That is the end - - -
KEANE J: Well, not quite. It has to be accepted by the judge. He is convicted upon the judge’s acceptance of the plea.
MR BELL: Yes, but if that is a plea based on instructions, your Honour, that may shade into the sort of cases Mr Lancaster has talked about. To come back to your Honour Justice Kiefel’s question, it may be that in some cases – I do not concede that this is one of them, but let it be assumed for the sake of argument, this is one – when one is looking at this as a question of principle and when one should modify or clarify the test to say the settlement is out, the settlement is on the wrong side of this, we say that leads to all sorts of difficulties.
Where the settlement advice is not to settle, and the advice is taken, and you get a reasoned decision, then you are going to the heart of the finality rationale, because you are unravelling the reasons. When the settlement advice is to settle, then depending on the particular facts, the judge may have played a really important role in the giving of that advice, such that there will become a justiciable issue in the subsequent case about the judge’s conduct – I do want to develop that a little bit more in a moment – or you get the cases where the judge has to approve the plea, or has to approve the settlement, or - - -
KEANE J: Yes, whether the person can read the plea and has full understanding.
MR BELL: Yes. So what do we then contemplate? Some very elaborate restated test that applies to some settlement advice but not other settlement advice, does not apply to advice not to settle, applies to advice to settle but only if that does not involve the judge in having some ongoing role. Does it apply where the judge has given some informal indication to the parties – as the decision in the English Court of Appeal in Kelley v Corston says – in chambers, at a preliminary hearing or at pre-trial directions – “You should think about settlement,” or where, after a bad cross-examination, “Do you want time to take some instructions from your client?” and all of those factors. So, with respect, when I was talking about a workable, sensible test, one has these points.
Your Honour, one point I have not developed - I have certainly developed, probably at length, this notion of the justiciable issue as to what the advocate took into account in giving the settlement advice. Let it be assumed that, say, in a family law case one of the advocate’s reasons is that Judge X is notoriously pro-husband or pro-wife and that is a factor which is tendered as part of the advocate’s defence for the alleged negligent advice.
Now, apart from the fact that this negligence case might be taking place in the District Court of New South Wales where the District Court judge and the subsequent putative negligence case is hearing the defence, the judge will have to decide as a justiciable issue, as a matter of fact in issue or maybe in issue, whether it was open to the advocate to take that view. It does not mean that the judge will necessarily find that as a fact the judge is but whether there was a reasonable basis for the advocate to hold that view.
Let it be supposed that a judgment is published and the District Court judge hearing the negligence suit said, “Yes, part of the reasoning was that Judge X is notoriously pro-husband or pro-wife,” can that judge continue to sit in the Family Court where another judge of another Australian court has found that it is reasonable for an experienced practitioner to take that view about that judge? There is a big difference here between the sort of case I am postulating and apprehended bias. Apprehended bias arises in the context of the facts of a particular case, that the judge may have, at an earlier separate hearing passed on the credit of a witness - - -
KIEFEL J: I think you are talking about an actual bias.
MR BELL: Actual or perceived because, in the scenario I am postulating, your Honour, it would be - - -
KIEFEL J: Perhaps not your best example.
MR BELL: With respect, your Honour, competent advocates every day of the week give settlement advice, are paid to give settlement advice and, if there are proceedings pending and the judicial officer is known, that settlement advice will take into account a whole host of factors, including factors about the idiosyncrasies of the particular judge. That is a reality of everyday experience at the Bar.
BELL J: Accepting that, Mr Bell, has it been common in England and in New Zealand for judges to be out of court constantly giving evidence about – you understand the point.
MR BELL: Well, your Honour, in England, as we understand the position, a judge cannot be compelled because of the law in England.
BELL J: What about in New Zealand? I mean, it just seems - - -
KIEFEL J: But there is judicial immunity, they cannot give evidence about their approach to their case.
MR BELL: Well, your Honour, then in a sense this argument is good for me either way, either we have the skewed situation, the 45 of D’Orta, or we have the other scenario and, your Honour, that was my reaction, judges are immune, they cannot be required. But if you go to the Evidence Act, the Evidence Act contemplates that they can. If you go to the common law in England, expert witnesses can now be sued.
So, with respect, I cannot give your Honour an empirical evidence answer one way or the other, but if you were advising, a barrister sued about allegedly negligent advice to settle, you would ask him or her what did you take into account, why did you give this advice, and nine times out of 10 an answer will include at least aspects of how the case was being conducted by the judge, the judge’s general reputation, disposition, et cetera, for generosity in giving verdicts or for meanness in giving verdicts, for example, and, if one is being sued in negligence, one has to explain why the advice you gave is reasonable. It is not fanciful, in my respectful submission.
FRENCH CJ: This is all premised on the proposition that D’Orta and Giannarelli, properly understood, extend the immunity to settlement advice in a case of the present character and that any interpretation of those cases which would cover this case amounts to a reopening and a reason for not doing that is this consequential consideration to which you have been drawing our attention.
MR BELL: That is so, your Honour.
FRENCH CJ: It is not to do with what is the actual scope of the test; it is what you would see as a departure from its actual scope.
MR BELL: Well, with respect, your Honour, what I have been trying to do, and perhaps I have not been as clear as I should, first we identify the notion of finality as broad, not narrow; broad in the sense of growing of controversies, whether that involves a judicial act or not. Secondly, we know from reference to D’Orta the identification of the administration of justice as a broad underpinning of the rationale as well. What I have been trying to illustrate in these arguments and these scenarios, your Honour, is that the application of the immunity as stated in the D’Orta test to the settlement advice context is that settlement advice is and should be within the test.
FRENCH CJ: This is under the general rubric that everything that Mr Reynolds puts is really an invitation to reopen D’Orta.
MR BELL: Reopen – on any of his arguments, in our respectful submission - - -
FRENCH CJ: Apart from D’Orta, in some way.
MR BELL: Yes. In any of his arguments, he wants to depart – whether it is an abolition or a modification to walk a notion of finality into the test or to exclude settlement – at which point I say, what about advice not to settle? What about - - -
FRENCH CJ: Yes, I understand all that.
MR BELL: Et cetera, et cetera. So, that is how these matters factor in. Your Honour, the decision in Landall v Dennis Faulkner & Alsop [1994] 4 MLR at 268 at 274, paragraph 23 - I go to this not because it continues to represent the law in England because, of course, it does not after Arthur Hall, but because, your Honour, it does add, I think, some credence to the – I might use the vernacular – the coalface reality of the interaction between advocates and the court in working towards settlements. At paragraph 23:
It is difficult to conceive of an activity that is so intimately connected with court proceedings as advising at the court door. It is at that stage that the practitioner is able to make his or her advice specific to the tribunal, to the available evidence and to the nature and quality of the opposition. It is common for such advice to be interspersed with sessions in court and to amount to immediate reflection upon the course of proceedings. The settlement may be total or it may leave issues –
As in Justice Kiefel’s example:
to be resolved by the court – in either event it manifestly affects “the way that cause is to be conducted when it comes to a hearing”. Two aspects of public policy are pertinent. First, any litigation as to a court door settlement necessarily requires a court to balance that settlement with what might have been obtained by litigation before a known (and not a notional) court of comparable jurisdiction – the risk of bringing the administration of justice into disrepute is obvious. Given that the reasonably skilled and careful practitioner must take into account the likely result of litigation before a particular judge, how can the identity of the latter be other than relevant?
So, your Honours, if a concern about finality in the narrower sense is the undermining of the role of the judge in our system of administration of justice, et cetera, this articulates, we would respectfully submit, in a cogent way, some of the points I have been seeking to make. I do not go to that because it stands as good authority in England any more – it does not. But, it does articulate strong reasons referable to the administration of justice. That was a case which said that, under the law in England at the time, the immunity should not be extended to settlement advice. The other decision in that context, your Honour, is the decision of the Court of Appeal in a case called Kelley v Corston [1998] QB 686.
That decision in Landall and this decision also are in addition to Biggar v McLeod where your Honour Justice Kiefel asked me does that show that settlement advice is in. These judges certainly took the view that it was. In Kelley v Corston there are two passages I would emphasise. At page 712, in the judgment of Lord Justice Pill and, interestingly, he is considering or discussing Lord Diplock in Saif Ali, which Mr Reynolds puts an emphasis on:
The intimate connection is also illustrated by the investigation as to the advisability of the settlement . . . Consideration of what would have happened at the avoided hearing and what the particular judge is likely to have decided would be necessary and though, as Lord Diplock stated, it would not be a collateral attack on the correctness of a subsisting judgment of the court, it would be a collateral investigation into the likely conduct of the case by the judge.
So one is looking at finality in all sorts of levels, although the originally apparently quelled dispute is not quelled; it has an ongoing life, its interstices are opened up. What happens is not an attack on an actual decision but consideration of the notional decision which becomes the counterfactual in the subsequent negligent suit. At about letter D:
While I accept that the plea of guilty has a public impact not always present in civil litigation, the potential wrong to the litigant may be as great in one situation as the other and the role of the person giving the advice is the same.
Then the other aspect of this judgment is at page 718 in the judgment of Lady Justice Butler-Sloss, where she says between E and F:
The alternative litigation over the door of the court settlement might raise-
So the alternative litigation is this putative, counterfactual litigation -
not only the considerations affecting the minds of the advocates . . . but might well require a case by case investigation of whether the court had or had not in the particular case some input.
It gives an example:
the judge has called the parties and advocates into the county court to obtain a realistic time estimate and in discussion with the advocates he has expressed a preliminary opinion -
et cetera. So in this subsequent case, the advocate is going to say in chambers the judge expressed this preliminary opinion or the judge, as we put in our written submissions, gave coded signals as, to be frank, judges do in lower courts and indeed in superior courts and consistent with the policy of encouraging early compromise and sensible attitude to compromise.
KEANE J: So the sorts of examples you are giving us are cases where the advocate would say he was not negligent because he took these matters into account. You say we should uphold the immunity on the basis not that they show that the advocate is not negligent but that there is something unedifying about this sort of dirty traditional linen being aired.
MR BELL: Well, it is a bit more than unedifying. What I am saying is that in the postulated subsequent negligence case it is not at all implausible that these sorts of arguments will be raised. They will be justiciable in the sense that if the advocate is to have a fair hearing he or she should be entitled to raise them; one would expect evidence to be led in respect to them.
It is not just a question of being potentially unedifying. There are tangible potential consequences for the administration of justice. There is the literal if the judge is called to give evidence. There is the consequential if, for example, the judge in the putative negligence case makes a finding that Judge X of the Family Court was reasonably believed to be pro-husband or pro-wife. That leads to the question, well, would not every subsequent party before that judge say, well, I do not want to have my rights determined by a judge – a judge of the Supreme Court of New South Wales, for example, has held to have a reputation for being pro-husband or pro-wife.
There are administration of justice considerations and there are administration of justice considerations which I accept were not necessarily the subject of argument in D’Orta or Giannarelli because the focus was not on this sort of settlement context, but what the burden on my argument is to say, administration of justice was one of the clear rationales for the continuation of the immunity and what we point to in scenarios where there is no reasoned judgment there are still serious and not far-fetched potential consequences for the administration of justice that one can identify and I have been trying my best to identify some of them.
So it all goes to ultimately the submission that there are powerful reasons not to succumb to or accept the arguments put by Mr Reynolds either as to reopening or, if it does not require reopening, tinkering with the test to exclude settlement advice on the simplistic basis that there was not a reasoned decision and therefore there is a misfit between the test and the rationale. We say the consequence shows that there is no misfit. The application of the immunity in the context of settlement advice furthers the administration of justice.
Now, finally, your Honours, may I say something very briefly about a point raised at the very outset, the agreed facts, et cetera. Now, this I must say took us completely by surprise. We were handed a proposed – I do not know when your Honours were handed the proposed amended order, we were handed it just before the Court came onto the Bench.
Your Honours, the position is this. The basis of the hearing before Justice Harrison is disclosed by the reference in the appeal book at 41, namely the order made by her Honour Justice Schmidt that a question decided separately and pick up page 40, the passage referred to by Justice Gordon at the end of paragraph 1. That is the first point.
Secondly, your Honours will be aware from paragraphs 12 and 13 of the defence at appeal book 23 and 24 that not only was negligence denied, but in paragraph 12 you will see an extensive pleading, not just a bare denial but an extensive pleading of why the denial of negligence is made good or the contentions are there set out. Thirdly, relevantly, your Honours will note that the notice of appeal, the orders sought in this Court at appeal book 103, the orders sought at paragraph 2:
That the separate question ordered by Schmidt J . . . whether the immunity is a complete answer . . . be answered in the negative –
That was the separate question designed to raise the point of principle and then the order 3 being sought was:
That the proceedings be remitted to the Supreme Court of New South Wales to be determined according to law -
consistent with the plain intention of the parties that the separate question would be determined on the limited agreement, agreed for the purposes of the determination of that question that the allegations in the statement of claim could be made out. In other words, what happens in every summary dismissal matter - there is no procedure under the Supreme Court Rules or the Civil Procedure Rules for a demurrer but a notional demurrer is what it in fact was.
Now, there may be - and certainly counsel appearing before Justice Harrison indicated that the proposed agreed facts are agreed solely for the purpose of the current argument, that is to say, the immunity - - -
GAGELER J: I thought there was authority in this Court that suggested that cannot be done consistently with an exercise of judicial power.
MR BELL: Well, your Honour, it was notionally a demurrer. The agreed facts - - -
GAGELER J: They are not really agreed facts, is what you are saying. It is not a real agreement.
MR BELL: No, the agreed facts represent and are - your Honour can, if one had a highlighter, one can relate each agreed fact to positive averments in the statement of claim.
KIEFEL J: Well, they are not agreed. They are allegations and therefore proceeding on a hypothesis if they are accepted.
MR BELL: Yes.
KIEFEL J: That is not a real demurrer, is it?
MR BELL: No, that is why I have used the expression “a notional demurrer”. There is no facility for a - - -
GORDON J: Was Chief Justice Bathurst wrong in paragraph 26?
KIEFEL J: “[s]eparate question on agreed facts”.
GORDON J: He said:
The matter thus did not fall to be determined on what Giles JA described at [42] as a “notional demurrer” - - -
MR BELL: Sorry, I have just lost the paragraph, your Honour.
GORDON J: It is on page 90 of the appeal book, paragraph 26.
MR BELL: Thank you, your Honour.
GAGELER J: Bass v Permanent Trustee is the case I had in mind, by the way.
MR BELL: Your Honour, we have dealt with this in our written submissions. That is why, I must say, to be handed this at 14 minutes past 10 took us by surprise. In our submissions filed in October, in paragraph 4 we made this point, including footnote 1, and we said in footnote 1 that given that the agreed facts substantially replicated the appellants’ pleading, the separate question was akin to a demurrer and suitable to answer on the agreed facts. We have given reference to some authority, including DPP v JM in this Court.
Now, your Honour, in my respectful submission, we do not concede that there was procedural infelicity, but plainly the way in which the parties have approached this matter – and I have not obviously had access to correspondence from the solicitors, et cetera, to track this through and there was no application to amend the notice of appeal and the grounds, but certainly my consistent understanding, having been in the matter not at the outset but from the New South Wales Court of Appeal was that a decision was made that this matter could be dealt with in a quasi-summary or a separate way by assuming that the allegations were true, for the purposes of the determination of that question.
With respect, what we see has occurred is regrettably nothing more than a highly opportunistic adventitious attempt to take advantage of something which may be ambiguous. It is not, as we understand it, the way either party has contended – and that is why the notice of appeal drawn by the solicitors who have been in the case from the outset – I am not sure if they are still in the case, but they were certainly in the case from the outset – say what they say; in other words, they contemplate that we have the answer to principle given as a result of the arguments, and then in light of that answer – and the appellants obviously hope for an answer which is in their favour on the immunity question – it goes back for the trial, including the trial of the matters raised in paragraphs 12 and 13 of the defence. That is our position on that.
GAGELER J: Mr Bell, can I just ask this? At page 71 of the appeal book, we see your client’s notice of appeal to the Court of Appeal.
MR BELL: Yes.
GAGELER J: Amended ground 1 says that:
Harrison J erred in finding that there was insufficient material . . . in circumstances where:
(a) there were agreed facts for the purposes of the separate hearing -
You see, about line 12, page 71?
MR BELL: Bizarrely, my appeal book is missing. I have 71 now – I am sorry, your Honour.
GAGELER J: Ground 1(a), is that what the Chief Justice is upholding in paragraph 26?
MR BELL: Yes, because Justice Harrison’s decision, actual decision – so Justice Schmidt ordered there be a separate question and Justice Harrison said, well, I am not going to answer it. So the appeal was formally, as reflected here – he said I am not going to answer it. The appeal was – well, Justice Schmidt had referred it, it was fully argued. It was capable of being resolved as a matter of principle and so what we had to do to get the matter in the Court of Appeal - his Honour erred by not answering the question. He had sufficient material and the agreed facts were the agreed facts for the purposes of the agitation of the question. That is the situation. Your Honour, I had not anticipated having to deal with that but, as I said, there is no formal application to amend the orders sought. If there were, we would oppose it.
FRENCH CJ: Thank you, Mr Bell. Yes, Mr Lancaster.
MR LANCASTER: Thank you, your Honour. I propose to address some only of the issues raised in paragraphs 5 to 9 of our outline of oral argument. The first proposition comes from paragraph 5 which is that an order made with the consent of the parties is as much an exercise of the judicial power as an order made after a contested hearing. In each case it is the judicial act – it is the order that quells the controversy.
Further, there is a variety of circumstances in which courts have, and will exercise a discretion not to make an order sought by parties by consent. Accordingly, there is no basis for thinking as perhaps as an unstated assumption in some of my learned friend Mr Reynolds’ submissions that a consent order is a lesser form of order or not really that judicial when analysed. The opposite is the case, in our submission.
We take some support from that from your Honour’s recent reasons for decision in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 – I think we have put [2015] HCA 46; 90 ALJR 113 on our list. Can I just go briefly to page 491 – I am sorry, I will give your Honours the paragraph references – [57], [58] and [59] on pages 127 to 128 of 90 ALJR and will not identify all of the relevant parts of those three paragraphs but perhaps just pick it up in the fourth line of paragraph [57].
Accordingly, settlements of civil proceedings are commonplace and orders by consent for the payment of damages and other relief are unremarkable. So are court-approved compromises –
Then your Honours refer to “infants”, others who lack capacity:
custody and property settlements . . . court-approved schemes of arrangements –
“court-approved compromises” of representative proceedings. Your Honours, our written submissions in this case provide references to the relevant legislative provisions that make precisely the same point, in our respectful submission. Your Honours Justices Gageler and Keane wrote separate reasons in the Director, Fair Work Case, but as we read your Honours’ decisions do not appear to doubt the important proviso that is referred to in the last line and a half of paragraph [57]. The orders will be made by consent in those circumstances:
provided the court is persuaded that what is proposed is appropriate.
That proviso of appropriateness is repeated in paragraphs [58] and [59]. I would draw attention to the last line and a half of paragraph [59] which, in our submission, is consistent with previous authority. We cite Justice Fullagar’s decision in Hansen in 1948 as one other example of the courts retaining a generalised discretion not to make orders proffered by the consent of the parties.
Justice Fullagar’s example was a situation where consent orders are put forward and the judge might notice some conduct in court that might indicate that there is not true consent to the orders that are made as one example. The proviso is, as we would submit your Honours have recently said, of a more general and thoroughgoing nature as to considering the appropriateness of it being made.
There are other authorities that we have put in our submissions about other reasons to refuse orders put forward by consent. Your Honour the Chief Justice in another place, in the Real Estate Institute of Western Australia Case, indicated that the Court always has an obligation to be satisfied of jurisdiction and power to make the order sought and that is not a light matter. In many cases, in day-to-day functioning of the courts, it will be done quickly, and to a person who wanders into the court perhaps perfunctorily, but it is, nevertheless, a very important precondition to a court making a consent order.
FRENCH CJ: Except a consent order for a money judgment can be made without any implied finding as to liability. We discussed that - I mentioned it, I think, in Newcrest Mining Ltd v Thornton.
MR LANCASTER: It can. Not to deny that there is a broader umbrella of possible circumstances that might come to the attention of the judge asked to make the order by consent other than the question of the underlying liability to the money judgment. Another example we have given is in Telstra v Minister in the Full Court of the Federal Court in 2008, and it is on our list, where an appellate court requires an identification of appealable error at first instance before allowing an appeal that is sought to be allowed by consent.
FRENCH CJ: That is in a rather special category.
MR LANCASTER: It is a special category but it is another example of the intervention of an exercise of the judicial function in the making of the orders to put into effect consensual resolution of proceedings. We have also enumerated various categories where statutes actually require that kind of judicial involvement in between the parties coming to a joint view about how it should be resolved and the actual resolution of the case.
The modern court processes for mediation is one very good example, whether they be the formal Rules of Court and statutory provisions as to mediation has also an informal aspect, that is, the judges have both a formal and informal role in settling disputes by mediation and the categories of representative proceedings and so on that I mentioned that your Honours referred to in the reasons in the Director, Fair Work Case.
That is all relevant, we submit, because the question that must be asked is how does all of that fit in with any reformulation that this Court might embark upon of the scope of the immunity? Is there to be posited a standard two-party case, if that really exists, where the immunity does not apply but that there is some other line drawn of cases where a certain amount or quality of judicial involvement is enough to require there to be an immunity so as to preserve the integrity of the exercise of the judicial function.
That difficulty in the line-drawing exercise is, in our submission, a real reason not to move from the present test as stated in D’Orta. It is just too hard to cut and dice the requisite level of judicial engagement for the purpose of reformulating the principle about immunity.
This leads into paragraph 7 of our written outline where we contend that settlement is part of the conduct of a case, necessarily and always part of the conduct of a case within the meaning of the principles stated in D’Orta, and we do ask rhetorically does anybody really doubt that settlement is part of the conduct of the case. We draw attention to two aspects of it in these proceedings. The plaintiff when it pleaded its case in this dispute did not seem to doubt it. In the appeal book in paragraph 4 of the statement of claim the pleading is that:
the defendant took over the conduct of the defence . . . including the conduct of settlement negotiations in relation to the proceedings –
That is on page 4 of the appeal book. That was met with the defence in paragraphs 4(a) and 4(c) of the defence, appeal book page 21, meeting that pleading on its ground in respect of the conduct of the defence including the conduct of settlement negotiations in relation to the proceeding.
But, moving from the particular to the general, we do identify other ways to show that settlement is part of the conduct of the case, and one example is the principle of a lawyer’s ostensible authority to compromise litigious disputes and to bind their clients to that compromise. This Court referred to that principle in Smits v Roach 227 CLR 423. Could I go to page 441 at paragraph 46, and the first two sentences of that paragraph in Smits v Roach are that:
The adversarial system of litigation operates upon the basis that a party is generally bound by the conduct of counsel, and that counsel has a wide discretion as to the manner in which proceedings are conducted. The width of that discretion is reinforced by the role of the barrister as an officer of the court, by the barrister’s paramount duty to the court, and by the public interest in the efficiency and finality of the judicial processes –
footnote (18), a reference to D’Orta. In other words, this principle of ostensible authority – and there are other principles of the law – depend upon and are underpinned by the same notion of finality as this Court relied on in D’Orta to support the immunity.
For example, another example might be thought to be Anshun estoppel, in which, to paraphrase that basket of principles, the law says no, that judicial controversy has come and gone; it has been resolved, and you will not now be permitted to go back to that controversy that has been terminated. When one considers the principle of ostensible authority of Anshun estoppel of these other aspects based on finality, there really does seem to us, with respect, to be an important coherence point; in other words, it would lead to incoherence if the rationale underlying the immunity were revisited, but these other principles of law continued on in their present form.
Can I briefly stray to a wider question where your Honour the Chief Justice asked my learned friend, Mr Reynolds, so far as the underlying rationale is concerned, is there a distinction between attacks on correctness and the principle of finality or the interests of finality and we agree, with respect, with my learned friend, Mr Bell, that finality in the sense used in D’Orta is a much wider concern and that seems to us to be explicit in D’Orta at paragraphs 32 and 43.
The concern of the Court with finality is not limited to challenges to correctness of decisions that have been made and in fact at paragraph 70 in D’Orta it is pointed out that usually the plaintiff will be relying on the continuing operation of the previous decision as that which proves the loss and so relitigation in the sense of going back over precisely the same ground is certainly one aspect of finality and there are costs and inefficiencies and so on involved with impugning that past conduct, but the vice to which finality guards against is that it controverts the fair or just basis of the orders being made and it really involves the proposition to allow the negligence action to go on to involve the proposition that that result ought not to have occurred.
That judgment though lawful in terms of correct and not appealed from and though operative is wrong and Chief Justice Bathurst in the Court of Appeal, at appeal book 94 at paragraph 41, uses “wrong” in this broader sense, in our respectful submission. In other words, the previous decision is taken to be lawful and effective and in that sense correct, but allowing the negligence action to go forward is wrong because it undermines the basic judicial function of quelling the previous controversy.
Finality is meant to prevent, in our submission, a new process, a new claim to the effect that the manner of the disposition of the controversy on the previous occasion does not occur with the real justice of the case or the underlying merits of the dispute. That is the interest that is being protected. It is not because it is unedifying or embarrassing to attack and examine the judgment. The real problem is it asserts that the judicial function of quelling the controversy has failed on the previous occasion; that is the real underlying vice, in our submission. The decision in D’Orta in paragraph 32, in our submission, expressly reverts to that fundamental principle as justifying immunity, correctly, we say.
Finally, your Honours, can I indicate that, as in paragraph 8 of our outline of argument the principles of abuse of process, in our submission, would not provide a satisfactory alternative to protect the interests that would otherwise be protected by the immunity, the first reason is that, as Justice McHugh said in D’Orta in paragraph 201, usually there would be no abuse in seeking compensation for a wrong - that is not an abuse of process.
So there would need to be some very fundamental reformulation of abuse of process principles to step in and take the role currently performed by immunity from suit, and if there were to be such a reformulation, even then we may not know an individual case of asserted negligence to what extent that case will require controverting the earlier decision without a very close examination of the matter, which rather defeats the whole purpose because that is what is precisely being sought to be avoided. May it please the Court.
FRENCH CJ: Thank you, Mr Lancaster. Yes, Mr Reynolds.
MR REYNOLDS: Your Honours, before I come to my reply, can I just correct a reference I gave to your Honours earlier when I misread my learned junior’s writing. It was to Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351, not the page I gave to your Honours.
I have a short number of points in reply. The first is I made or attempted to make quite an important point out of Justice Handley’s observations in the Donellan Case about the problem with the reasoning, we submit, about this finality tenet in D’Orta because of the many, many cases in the books involving actions for negligence against solicitors involved in litigation.
My learned friend, faced with that point, attempted to give it very short shrift and his response was to brush it off completely on the ground that he said solicitors now have immunity as a result of the decision in D’Orta. There are a couple of problems with that. The first is that the effect of D’Orta, as we discussed earlier, is not to give solicitors engaged in litigation a total immunity for all conduct and management of litigation.
There is a rump of cases that will be outside the immunity stated in D’Orta no matter how it is interpreted and in that rump of cases if action is brought against the solicitor, or for that matter an advocate, then inevitably that case will involve a reagitation of issues, a relitigation of what would have happened if the original case had proceeded without negligence.
The other aspect of it is that the existence of so many of those cases on the books, I submit, points up the fact that history is against my learned friend and against the decision, with respect, in D’Orta in saying that there is this fundamental tenet. We submit, and have submitted before, and there was no response to this, that that line of cases shows, in short, that there is no such tenet.
Now, the second matter that I would like to raise is my learned friend ascribed to me a submission along the lines of not owning up to the fact that cases post D’Orta, in relation to settlement advice are against my client. That is not my recollection of what I said. What I said is that there were some in our favour and that there were some against and I referred in that regard to the decisions in the Court of Appeal – to some decisions in the Court of Appeal and those various decisions are referred to in paragraph 12 of our reply – I withdraw that. Some of the decisions that are in our favour, post D’Orta, on settlement advice are in the last few lines of paragraph 12 of our reply. So to suggest that there are no such cases, if that is what my learned friend was saying, is not correct.
The third matter I would like to respond to is what I will call the skewed litigation point. My learned friend described this as a matter which this Court in D’Orta had described as important. We would submit that the reference in paragraph 45 of D’Orta, if your Honours were to go to it briefly, is a very fleeting reference to that whole concept. It certainly was not on any view a major part of the reasoning of this Court in the D’Orta Case in relation to upholding the immunity.
KEANE J: Well, it actually says “the central justification for the advocate’s immunity”, paragraph 45.
MR REYNOLDS: Paragraph?
KEANE J: Paragraph 45 describes it as “the central justification for the advocate’s immunity”.
MR REYNOLDS: Yes, your Honour. I have mentioned those lines many times. I have embraced it as part of my argument. But this is the tenet or principle that controversies once resolved are not to be reopened. I agree that is the central proposition. My point is this notion just of skewing litigation is an aside rather than some key component in the argument.
KEANE J: Well, it is not if one understands quelling litigation as being the quelling of litigation by a judicial decision, which might be thought to be what the Court was talking about at paragraphs 31 to 33, just as Justice McHugh talked about it in that sense. That is to say that it is the actual judicial decision that is not able to be challenged collaterally - the judicial decision and the means by which it has been obtained, as opposed to a decision made by the parties independently of the court’s rulings – a decision made by the parties by agreement between themselves, and not because they have been subjected to the processes of government.
MR REYNOLDS: Your Honour appreciates that is our first argument. We embrace that in the sense that that is the way we submitted this test in D’Orta and any previous test should be interpreted, namely that there must be a collateral attack on the correctness of a decision of the Court – “decision” meaning a decision on the merits. So, your Honour, I do not take issue with that concept.
So far as skewed litigation is concerned, can I give your Honours a reference - I do not think your Honours have this on any list of authorities - to a decision, a very recent one, of the Victorian Court of Appeal in a case called Rosa v Galbally (2013) 42 VR 382. That was a case which involved an action against a solicitor in relation to settlement advice, but it would appear the immunity was not pleaded.
If your Honours wish to see a demonstration of why there is not skewing, your Honours only need read that case and see how the issues unfolded and how they were dealt with by that court. It is not, I submit, a practical problem and if it were it is an issue which would have surfaced in one of the jurisdictions – and this was your Honour Justice Gordon’s point – where the immunity has either never existed, like United States and Canada, or in jurisdictions where the immunity no longer exists, namely, the United Kingdom and New Zealand. This sort of problem would have loomed – whatever the problem is.
The only thing that I would say in further response to what my learned
friend said is that if one is talking about matters which
are – to
pick up what your Honour Justice Keane said – namely,
unedifying – one has to factor this into the equation
and that is
someone conducting the negligence case against the advocate or solicitor is
conducting that case in front of another
judge. Commonsense would suggest that
that advocate conducting the case, the negligence case against the solicitor,
would have in
mind that raising matters which are utterly unedifying will
probably not assist his client in persuading that particular judge to
find in
his client’s favour.
That, I suggest, is probably one of the
reasons why this issue does not loom at all in any of these cases and if it had
been a problem
my learned friend would no doubt have pointed to the sort of
alleged problem that has arisen and the difficulties that have been
engendered.
It is not a practical problem and this is analogous, I respectfully submit, to a
sort of floodgates style argument.
The fourth matter that I would like to raise apropos particular some of the observations that your Honour Justice Gordon made is simply to record that in the agreed facts at page 33 at line 11, it is an agreed fact that the ANZ Bank accepted – this is in open court:
that the debt due by the first plaintiff and Lord on the said guarantee was $1.5 million plus interest plus enforcement costs –
and that replicates what was in the statement of claim in the appeal book, page 4, line 35, and the defence at page 22, line 8, where the admission is made.
The fifth point is this. My learned friend, Mr Bell, seemed to make some sort of point about the word “subsisting” in the collocation “subsisting decision”. The first argument that I put was that, picking up what Justice McHugh said in D’Orta, one has to read the plurality judgment as relating to an actual decision of the Court. The talk about subsisting does not undercut that because there is a decision, it is just an extra epithet.
But, in response to your Honours Justices Gageler and Nettle, I said – and I put this at the end of my argument – that the use of the word “subsisting” really shows the problem with finality, which was my third argument, namely, that there is no problem in relitigating if the decision has already been overturned by a court of appeal and there is none that exists. So this point attaches to both the first and the third argument and occasions no difficulty with either of them.
Next, your Honours, my learned friend kept submitting that in relation to all of my arguments, D’Orta or Giannarelli or both have to be reopened. I submit that the first two arguments which I put to your Honours clearly do not require reopening the correctness of D’Orta or Giannarelli. They may involve some clarification of the tests which were adopted, but not overruling.
Next, can I respond to the suggestion that there was some terrible ambush in relation to the orders sought, namely, based upon the agreed facts. This issue was canvassed in the submissions and it is in our reply at page 2, footnote 5, where it is pointed out that the status of the agreed facts may not be as clear as the respondent contends, referring to the decision in Bass v The Permanent Trustee.
Your Honours, we have picked up on that line of authority and we have picked up on paragraph 26 of the Chief Justice’s judgment. We do not wish to make any huge deal about it and we are happy to leave it to your Honours, but we felt we were obliged to raise the issue which was raised in Bass.
NETTLE J: But JM overrode that, did it not?
MR REYNOLDS: There is a well-known page in Bass which quotes Lord Justice Diplock as he was in Fidelitas Shipping and that page says that where you have a separate trial, and this was a separate trial, on particular facts, that that creates a form of res judicata and that is the gist of what we were raising, both in that footnote and in relation to paragraph 26 of Chief Justice Bathurst and we felt that we should raise it.
GAGELER J: You make no application to amend your notice of appeal to this Court, do you?
MR REYNOLDS: No, your Honour, in the same way as from time to time, one might say, and I am sure I have said more than once, the orders which we have sought in the appeal book do not quite do the trick. You need to make orders for the following effect but again, the fact that I am not making an application underlines the fact I am really just raising this as a matter which we feel that we ought to raise with your Honours. We were proceeding on the basis of what the Chief Justice said and I am happy to leave it there.
My learned friend, Mr Lancaster, raised - as did my learned friend, Mr Bell - they kept coming back to an observation that your Honour the Chief Justice made when I was on my feet in-chief about finality being a broader concept than correctness of decision, as though I was General Gordon at Khartoum and your Honour the Chief Justice had put that as a spear through my chest. I do not understand, with respect, the relevance of this. We have conceded that this challenged - the tenet of finality as has been described is way too wide and it is obviously way wider than the notion of correctness of decision and nobody could possibly dispute that and nor do I.
Your Honours, the final point that I would make is simply this. It is said in the third part of my submissions that I would give my learned friend, Mr Bell, some numbered propositions which would make it easy for him to respond on the 14 points I put on reopening and reconsideration. My respectful submission is that it is very revealing that my learned friend made his response to those points with such a light touch. Your Honours, if the Court pleases, those are my submissions.
FRENCH CJ: Yes, thank you, Mr Reynolds. The Court will reserve its decision. The Court adjourns to 9.45 tomorrow morning for pronouncement of orders.
AT 4.55 PM THE MATTER WAS ADJOURNED
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