LAW1113 Assignment 2018 PDF

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Torts research essay on vicarious liability - completed in Semester 1 2018...

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TORTS (LAW1113) SEMESTER 1, 2018

CASE REPORT – KENDIRJIAN V LEPORE [2017] HCA 13

PART ONE

MATERIAL FACTS In November 1999, the Appellant, Mr David Kendirjian, was injured in a motor vehicle accident, and in 2004, the Appellant commenced proceedings in the District Court against Ms Cheree Ayoub, the Defendant. In August 2006, the Defendant’s representatives made a settlement offer of $600,000 plus costs to the Appellant’s solicitor and barrister, Mr Eugene Lepore (the First Respondent) and Mr Jim Conomos (the Second Respondent). The offer was rejected, so the trial proceeded. The Appellant was ultimately awarded damages of $308,432.75 plus costs. An appeal to the Court of Appeal was dismissed.

In October 2012, the Appellant commenced proceedings against the Respondents in the District Court, alleging that they did not advise him of the amount of the settlement offer ‘but merely of the fact that an offer had been made’ and they had rejected it without the Appellant’s ‘express instructions’ on the basis that it was ‘too low.’ The Appellant sought to claim the difference between the settlement offer and the judgment as damages caused by the Respondents’ negligence. However, the proceedings were summarily dismissed in 2014 because the Respondents were immune from suit under the doctrine of advocates’ immunity. The Court of Appeal upheld the decision.

An appeal to the High Court was granted by special leave. Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ heard the appeal, and a majority found in favour of the Appellant with the exception of Nettle and Gordon JJ (both had expressed some doubt about the decision). Prior to the appeal, the High Court had decided Attwells v Jackson Lalic Lawyers Pty1, where it limited the scope of advocates’ immunity. This led to the First Respondent to consent to orders made in 1 [2016] HCA 16. 1

relation to him. However, the Second Respondent submitted that the reasoning in Attwells could be distinguished or alternatively reopened.

LEGAL ISSUES The legal issues contested in Kendirjian v Lepore2 include: whether advocates’ immunity was applicable where negligent advice is given not to settle litigation, and whether Attwells should be distinguished or reopened. Edelman J concluded that the immunity did not extend to the giving of negligent advice in relation to the settlement of proceedings, and that the reasoning of the majority in Attwells could not be distinguished or reopened.

LEGAL REASONING In dismissing the appeal, the Court of Appeal relied upon seriously considered obiter dicta in its earlier decision of Donnellan v Woodland3. Beazley JA held that the immunity would apply only in circumstances where the giving of advice, or omission to give advice led to a decision to either continue or to not continue with the case 4. The immunity, therefore, extended to Kendirjian because the Respondents’ advice had affected the conduct of the case by requiring it to continue. However, Edelman J found that the decision in Donnellan was ‘inconsistent with the course of the development of the principle of advocates’ immunity.’5 Subsequent to the Court of Appeal decision, Mason CJ held (in Giannarelli v Wraith) that the immunity could extend to work done out of court, which led to a decision affecting the conduct of the case in court 6. This decision was reaffirmed in D’OrtaEkenaike v Victoria Legal Aid7, as a majority of the High Court saw no reason to depart from the test described in Giannarelli. In Attwells however, the High Court found that the immunity did not extend to advice that was not ‘intimately connected

2 [2017] HCA 13. 3 [2012] NSWCA 433. 4 Ibid 198. 5 Ibid 27. 6 (1998) 165 CLR 543, 21. 7 [2005] HCA 12. 2

with the conduct of the case in court’, and that a settlement offer out of court did not fall within the scope of the immunity8. The same principle was upheld in Kendirjian.

On the other hand, the Second Respondent sought to distinguish the reasoning in Attwells because it would involve a possible departure from the decision of the District Court. In order to explain why the amount of damages awarded was considerably lower than the amount of the settlement offer, the Respondents could seek to use the adverse findings of the Appellant’s credibility. Edelman J rejected the submission on the basis that the decision of the District Court was relied upon by the Appellant to prove an alleged lost, and that the Appellant’s credibility was found to be independent of the District Court’s reasoning. An alternative submission made by the Second Respondent was to reopen part of the decision in Attwells where Mason CJ quoted McCarthy P in Rees v Sinclair9. The Second Respondent argued that work done out of court fell within the scope of the immunity but Edelman J held that the distinction between work done which led to a decision affecting the conduct of the case in court and work done affecting the way the case is to be conducted in court was ‘illusory’. As a result, the Second Respondent’s application to reopen Attwells was rejected.

PART TWO Under the common law doctrine of advocates’ immunity, legal practitioners cannot be sued for any negligent act or omission arising in the conduct of a case in court, or in any out of court work that is directly related to the conduct of the case in court 10. In tort law, professional negligence is a breach of the duty of care owed by a professional to a client. It is essential that all legal practitioners exercise a reasonable standard of care and skill in the provision of legal services. A breach will occur where there is a failure to exercise a reasonable degree of care, resulting in either financial or other loss for the client11. As a result, the client may be entitled to compensation in order to 8 Ibid 31. 9 [1974] 1 NZLR 180, 187. 10 Ibid 28. 11 Ray Finkelstein et al, LexisNexis Concise Australian Legal Dictionary (LexisNexis, 5th ed, 2014). 3

recover the loss. The immunity, therefore, protects barristers and solicitors from potential liability.

The doctrine of advocates’ immunity was first adopted by the High Court from English common law in Giannarelli. The Court had followed the decision in Rondel v Worsley, where the House of Lords confirmed that public policy considerations required the maintenance of the immunity12. However, the scope of the immunity was very wide. A majority held that the immunity extended to ‘work done out of court which leads to a decision affecting the conduct of the case in court.’13 The Court also reaffirmed the position of the immunity at common law in D’Orta-Ekenaike. It was held that an advocate could not be sued for professional negligence where work was ‘intimately connected’ with the conduct of the case in court 14. Furthermore, the retention of the immunity was based on several public policy considerations. The Court reasoned that the immunity should stand in order to protect the certainty and finality of court decisions, and to maintain the public’s overall confidence in the judicial process15. Mason CJ16 observed that there would be adverse consequences on the administration of justice if court judgments could be reviewed or re-litigated in collateral proceedings17. An important aspect of the judicial process is that ‘controversies, once resolved, are not to be reopened except in very few, narrowly defined, circumstances.’18 For example, if an advocate is found to be liable for negligence, a client might be encouraged to bring an action against the advocate for a more favourable outcome, and if the client is successful, the resolution of the issue may undermine the authority and finality of the previous court judgment.19 In addition, 12 [1969] 1 AC 191, 284-285. 13 Ibid 28. 14 Ibid. 15 Julia Werren and Amanda Williamson, “Advocates’ Immunity: Finality Reigns Supreme” (2005) 2(1) UNELJ 103, 104. 16 In Giannarelli v Wraith (1998) 165 CLR 543. 17 Kieran Hickie, “The Interaction Between The Advocates’ Immunity And Claims For Compensation Under The Civil Procedure Act 2010 (Vic)” [2014] Foley’s List, 4 [16]. 18 Ibid 22. 19 Queensland Parliament, “Lawyer’s Immunity” (Queensland Parliamentary Library, 2005) 4. 4

advocates have a paramount duty to ensure the success of their client’s case. In order to do so the advocate might have to act in a way that the client may not necessarily approve of. Thus, if the client wishes to pursue legal action for the advocate’s conduct, the advocate will have the benefit of protection under the immunity20. Advocates’ immunity, therefore, limits collateral attacks on final court decisions, and ensures the smooth and efficient administration of justice. It is also fundamentally concerned with the protection of counsel as well as the finality and certainty of court proceedings. Per Dawson J in Giannarelli, the appeal process is the means by which a decision of the court should be corrected if it happens to be wrong21.

On the other hand, both Nettle and Gordon JJ expressed a concern that it was possible for a negligence action to lead to a collateral attack, which would in turn affect the finality of the initial court judgment. Edelman J was of the same view when he explained that the issue of negligence would be determined at the time the advice was given and not at the time of the judgment. However, the point was expressly left open (in Kendirjian)22. In addition, some have opposed the High Court’s decision to retain the doctrine of advocates’ immunity in Australia. In dissent, Kirby J found that the immunity could not be a part of Australia’s common law on the basis of authority, principle and policy, and that in choosing to maintain the immunity, the Court was put ‘out of step with the rest of the legal world’, since the principle no longer exists in many other common law jurisdictions such as England23. In Arthur J S Hall & Co v Simons, the House of Lords unanimously decided to abolish the immunity because it was no longer in the public interest that advocates remain immune for negligent conduct24. In addition, Kirby J held that the lack of immunity available for other professionals in Australia such as doctors, teachers and financial advisors called for its abolishment25.

In both Attwells and Kendirjian, the High Court once again declined an invitation to abolish the immunity at common law. The Court found that the immunity did not 20 Ibid 3. 21 Ibid 4. 22 Anthony Surdo and Lucy Vujcic, “The Scope of Advocates’ Immunity Affirmed” [2017] (33) LSJ 82, 83. 23 Werren and Williamson, above n 15, 106. 24 [2002] 1 AC 615. 25 Werren and Williamson, above n 15, 106. 5

extend to advice that led to out of court settlements, and it was held to apply only in circumstances where advice is ‘intimately connected with work in court.’ In addition, there needed to be a ‘functional connection’ between the advocate’s work and the determination of the case in order to have the benefit of advocates’ immunity26. Negligent advice to settle or to not settle proceedings establishes only a historical or causative relationship between the advice and the continuation of the case 27. A majority of the Court also upheld the reasoning in Kendirjian. Although the Respondents’ advice led to a continuation of the proceedings, it did not establish an intimate or functional connection because it did not affect the outcome of the case.

The High Court also recognized the need to retain the immunity on the basis of important public policy considerations. There was an obligation to ensure consistency and continuity in the interpretation of the law, and to uphold the legal principles of certainty and finality in the resolution of disputes. Furthermore, the majority held that a decision to abolish the immunity was ‘best left to the legislature’, as it would result in a substantial change in the law 28. However, in deciding Kendirjian, the Court significantly narrowed the extent to which the immunity could apply in various aspects of litigation. The immunity arises only in circumstances where an advocate’s conduct is capable of affecting the decision of the case in court. Advice provided to settle, or to continue with proceedings does not amount to an intimate or functional connection with the determination of the case required to sustain the immunity. In conclusion, the decision made by the High Court in Kendirjian was of particular significance because it confirms that the scope of the immunity is limited only to circumstances where an advocate’s conduct is capable of moving litigation towards a determination of the case in court. Furthermore, it rules out any possibility that the immunity might extend to an advocate’s negligent advice, which leads to the settlement of proceedings between parties. In summary, it is now abundantly clear that the doctrine of advocates’ immunity will continue to remain part and parcel of Australia’s common law for an indefinite period of time, unless or until there is further legislative change. 26 Surdo and Vujcic, above n 22, 83. 27 Ibid. 28 Alan Musikanth, “Advocates’ Immunity – The High Court Speaks (Yet Again)” (2016) 43(7) Brief 24, 26. 6

Word Count: 1996

BIBLIOGRAPHY

A. Articles/Books/Report Abadee, Alister, “Attwells V Jackson Lalic Lawyers: Will The High Court Re-Draw The Boundary Of Advocates’ Immunity?” (2016) 24(1) Tort Law Review Emmett, Arthur, “Principles Relating To Advocate’s Immunity Following Attwells V Jackson Lawyers And Kendirjian V Lepore” (2017) 30(4) Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia Finkelstein, Ray et al, LexisNexis Concise Australian Legal Dictionary Foley, James, “Limits of Advocates’ Immunity Confirmed” [2017] The Journal of the New South Wales Bar Association Groves, Matthew and Mark Derham, “Should Advocates’ Immunity Continue?” (2004) 28(1) Melbourne University Law Review Hickie, Kieran, “The Interaction Between The Advocates’ Immunity And Claims For Compensation Under The Civil Procedure Act 2010 (Vic)” [2014] Foley’s List Kim, Jennifer and James Li, “Advocates’ Immunity: Attwells & Kendirjian” Musikanth, Alain, “Advocates’ Immunity – The High Court Speaks (Yet Again)” (2016) 43(7) Brief Surdo, Anthony and Lucy Vujcic, “The Scope of Advocates’ Immunity Affirmed” [2017] (33) LSJ Werren, Julia and Amanda Williamson, “Advocates’ Immunity: Finality Reigns Supreme” (2005) 2(1) UNELJ

B. Cases Arthur J S Hall & Co v Simon [2002] 1 AC 615 Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16 D’Orta-Ekenaike [2005] HCA 12 Donnellan v Woodland [2012] NSWCA 433 Giannarelli v Wraith (1998) 165 CLR 543 Kendirjian v Lepore [2017] HCA 13 Rees v Sinclair [1974] 1 NZLR 180 7

Rondel v Worsley [1969] 1 AC 191

C. Other Kiefel, Susan, “Actions For Negligence Against Barristers in England And Australia” (Speech, International Malaysia Law Conference, Kuala Lumpur, 2014) Queensland Parliament, “Lawyers’ Immunity” (Queensland Parliamentary Library, 2005)

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