Gray v Morris[2004] QCA 5

SUPREME COURT OF QUEENSLAND

1. McPHERSON JA:  This is an appeal against a decision in the District Court giving summary judgment for the defendant in proceedings by the plaintiff Gray, who is a solicitor, against the defendant Morris, who is a barrister, for damages for negligence and other causes of action arising out of advice alleged to have been provided or not provided by the latter to the former in 1995.  The facts as they are alleged to be are set out in the reasons of McMurdo J, which I have had the advantage of reading and with which I agree.  I wish to add something only about the claim for breach of fiduciary duty, which it was sought to include by amendment at the hearing below, but which the learned judge refused to permit.

2. The essence of Gray’s case is that in a conversation in 1995 Morris asked Gray to authorise the joinder of his firm Gray & Maloney as co-plaintiffs in a Supreme Court action for damages by various clients, for whom the defendant was already acting on instructions from another firm of solicitors, against the National Crime Authority (“NCA”). The statement of claim in the Supreme Court proceedings was then in draft form, or was in the process of being drafted by the defendant; but, from what is alleged or accepted by the parties in this appeal, it seems clear that Gray had not yet seen it and that he did not see it until some considerable time after it was delivered in 1995.

3. Paragraph 14(c) of Gray’s own amended statement of claim in this action against Morris contains an allegation that Gray requested, and Morris agreed, that Gray & Maloney not be made a party to any claim for damages or other substantive relief, and that their only involvement in the Supreme Court proceedings would be nominal in nature and then only as was strictly necessary in connection with recovering possession of the documents seized by the NCA. This allegation, which in Gray’s statement of claim is designated “the assurance”, is denied by the defendant, and of course remains to be adjudicated upon.

4. Gray claims that he acted on Morris’s assurance in giving his assent to the joinder of Gray & Maloney as co-plaintiffs in the Supreme Court proceedings; but that, in settling the statement of claim that was later delivered in those proceedings, Morris failed to give effect to the assurance. As a result, or so it is alleged, Gray sustained loss and damage from a costs order made against him or his firm in favour of the NCA when the clients’ proceedings in the Supreme Court were terminated in 2001.

5. Paragraph 22C of Gray’s amended statement of claim in this action contains the main allegations that the District Court judge refused leave to include as a breach of fiduciary duty. It claims that if Morris had not provided the designated assurance or if he had revised the statement of claim in the Supreme Court proceedings “as referred to in sub-paragraph 18A(b)”, the plaintiff would not have permitted Gray & Maloney to become plaintiffs in those proceedings or would have obtained independent advice on the matter. It may be that the specific allegation about revising the statement of claim needs some further attention in the form in which it is now cast. In an effort to condense it, the pleader may have tried perhaps to cram too much into a single paragraph. But the meaning is clear. It is that Morris did not in fact revise the statement of claim in accordance with the assurance designated in paragraph 14(c) or recommend that Gray take independent advice.

6. It seems to me that the allegations in paragraph 22C and elsewhere in Gray’s pleading are fairly capable of giving rise to the claim for relief arising out of the breach of fiduciary duty that is then made in paragraph 23. There are, incidentally, other materials that show that Gray and Morris were friends of long standing, so that it was not entirely unnatural for Gray to rely on the “assurance” he claims was given without himself taking independent advice. Indeed, the whole problem appears to have stemmed from the rather informal way in which the parties approached the matter of joining Gray & Maloney as co-plaintiffs. However that may be, the relationship that is alleged to have been constituted or prevailed between Gray and Morris is fairly capable of being brought within the test for a fiduciary propounded by Mason J in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, 96-97; that is to say:

“the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense.”

In drafting or revising the statement of claim so as to effect the joinder of Gray & Maloney as co-plaintiffs, Morris can on the allegations made be seen as having undertaken to act as the agent of that firm, at the same time as doing so for his other client plaintiffs for whom he was already acting. Their interests were in all respects by no means concurrent.

7. Of course, all of this rests at present in allegation only. Nothing has been proved. But it is quite another matter to say that Gray should at this stage be denied the opportunity of making the allegations and of proving them if he can. Assuming the necessary evidence is given and accepted, it goes too far to say, in terms of UCPR 293(2)(a), that he has no real prospect of succeeding on all or a part of his claim.

8. I agree with the orders proposed by McMurdo J.

9. CHESTERMAN J:  UCP Rules 292 and 293 provide respectively that if the court be satisfied that a plaintiff has no real prospect of succeeding on its claim, or that a defendant has no real prospect of successfully defending the plaintiff’s claim, it may give judgment for the plaintiff or defendant, as the case may be.  The power to give summary judgment for a defendant is, of course, new.  The previous O 18 and O 18A provided that if the plaintiff in a limited class of cases deposed that there was no defence to the claim a judge might give judgment for the plaintiff unless the defendant showed that there was “a question in dispute which ought to be tried or that there ought for some other reason to be a trial ...”.

10. The manner in which a judge had to approach an application for summary judgment brought by a plaintiff under the previous rules was stated in plain terms by a unanimous judgment of the High Court, Fancourt v Mercantile Credits Limited (1983) 154 CLR 87 at 99.  It is worth remembering what the court said:

“The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: see Clarke v Union Bank of Australia Ltd (1917) 23 CLR 5; Jones v Stone [1894] AC 122; Jacobs v Booth’s Distillery Co (1901) 85 LT 262”.

In Jones the Privy Council had said that an application for summary judgment should succeed only where “there can be no reasonable doubt” that the applicant was entitled to judgment.

11. For my part I do not consider that the new rules require any robust assessment of the outcome of litigation in advance of the trial. The reasons which lie behind the caution expressed by the High Court and the Privy Council are still valid. A plaintiff who claims to have a cause of action should not be prevented from prosecuting his claim unless it be obvious that he cannot succeed. Likewise, a defendant who resists a claim should not suffer judgment unless it be clear that neither the facts nor the law will assist him. The new rules, just as the old, are concerned with depriving a litigant of participation in the process which the law has always regarded as being the appropriate means of determining rights. The deprivation should only occur in a clear case, as the High Court said.

12. The English Civil Procedure Rules are identical in effect to the UCPR in this regard. CPR 24.2 provides that the court may give summary judgment for plaintiff or defendant if it considers that there is no real prospect of succeeding on the claim or defence. Speaking of the rule in a passage which has been much quoted, Lord Woolf MR in Swain v Hillman [2001] 1 All ER 91 at 92 said:

“... the court now has a very salutary power, both to be exercised in a claimants favour or ... a defendant's favour.  It enables the court to dispose summarily of both claims [and] defences which have no real prospect of being successful.  The words ‘no real prospect of succeeding’ do not need any amplification, they speak for themselves.  The word ‘real’ distinguishes fanciful prospects of success ... they direct the court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.”

13. I accept, of course, that the words of UCPR rr. 292 and 293 must be given that ordinary meaning; whatever that is. A requirement that judgment should be entered if a judge be satisfied that a litigant has no prospect of succeeding in his action or defence is comprehensible. A claim or defence that has only a fanciful prospect of success nevertheless has a prospect of victory. I do not understand how such a prospect can be seen not to be real unless there is a trial, or something like it.

14. Speaking in justification of the new rule Woolf MR said (94)

“It is important that a judge in appropriate cases should make use of the powers contained in Pt 24 ... It saves expense; it achieves expedition; it avoids the court’s resources being used up on cases where this serves no purpose, and I would add, generally, that it is in the interests of justice.  If a claimant has a case which is bound to fail, then it is in the claimant’s interests to know as soon as possible that that is the position.  Likewise, if a claim is bound to succeed, a claimant should know that as soon as possible.”

Expedition in litigation is no doubt admirable, as is the careful expenditure of the court’s limited resources.  I doubt that it is in the interests of justice to give summary judgment except in cases where it is clear that the claim, or the defence, as the case may be, will fail.

15. The Master of the Rolls may well have amplified the meaning of the Rule though he denied it needed any amplification. A claim or defence which has no real prospect of success is one which is bound to fail. If one adopts this as the proper test then one has a clear basis on which to proceed. A claim which is bound to fail is one which cannot succeed. It is one which cannot possibly succeed.  It is one which has no prospect of success. 

16. It is worth pointing out that Swain was concerned with a claim for personal injuries caused when a plank fell on a workman from a building under construction.  Proof of the plaintiff’s claim seemed problematic.  The defendant’s application for summary judgment was refused.  Lord Woolf noted (95)

“Useful though the power is ... it is important that it is kept to its proper role.  It is not meant to dispense with the need for a trial where there are issues which should be investigated ... the proper disposal of an issue under Pt 24 does not involve the judge conducting a mini trial ...”

Judge LJ observed (96)

“To give summary judgment against a litigant on papers without permitting him to advance his case before the hearing is a serious step.”

17. There was discussion about the meaning and application of the rule by the House of Lords in Three Rivers District Council v Bank of England (No 3) [2001] 2 All ER 513.  Lord Hope (with whom Lord Steyn agreed) said (541-542)

“The difference between a test which asks the question ‘is the claim bound to fail?’ and one which asks ‘does the claim have a real prospect of success?’ is not easy to determine ... The overriding objective of the CPR is to enable the court to deal with cases justly ... the court must ensure that there is a fair trial.  It must seek to give effect to the overriding objective when it exercises any power given to it by the rules or interprets any rule ... While the difference between the two tests is elusive, in many cases the practical effect will be the same.  In more difficult and complex cases ... attention to the overriding objective of dealing with the case justly is likely to be more important than a search for the precise meaning of the rule.”

Lord Hobhouse remarked pithily (568):

“There is no point in allowing claims to proceed which have no real prospect of success, certainly not in proceeding beyond the stage where their hopelessness has clearly become apparent.”

18. Three points emerge from this discussion in my opinion. They are: (i) under the new rules as under the old ones it is a serious step to order judgment in advance of trial; (ii) the rules as to summary judgment are to be applied in order to do justice between parties; (iii) a claim or defence which has “no real prospect of succeeding” is one which is “hopeless” or one which is “bound to fail”.

19. A number of decisions in this court have approved Lord Woolf’s dictum in Swain but without reference to his Lordships own exegesis or to the observations in the House of Lords in Three Rivers.  A review of those cases, however, shows that the outcome in each to be consonant with the Fancourt approach.   

20. In Foodco Management Pty Ltd v Go My Travel Pty Ltd [2002] 2 Qd R 249 an application by a defendant for summary judgment was dismissed where the plaintiff’s claim depended on proof of a disputed question of fact.  The defendant argued that the dispute could be resolved in its favour by reference to uncontentious documents.  The matter was sent to trial.  In Queensland University of Technology v Project Constructions (Aust) Pty Ltd [2003] 1 Qd R 259 the Court of Appeal purported to apply a test expressed in the literal terms of UCPR 293 but sounded the caution that

“great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case.”

That appeal turned upon the proper construction of the terms of a building contract.  The facts were not in dispute.  The terms of the contract, properly understood, determined who won. 

21. In Bernstrom v National Australia Bank Limited [2003] 1 Qd R 469 the Court of Appeal again endorsed the remarks of Lord Woolf in Swain.  Bernstrom was a case in which the plaintiff’s right to relief depended upon proof of an oral agreement with the defendant.  The defendant filed affidavits deposing to the terms of the conversation which showed that the alleged agreement had not been made.  The plaintiff ultimately accepted that the defendant’s version was correct.  There was therefore no evidence to support the agreement which was the plaintiff’s only hope of proving its case.

22. Jones J who gave the judgment of the court expressed the view (475) that UCPR 293

“... reflects a change in the philosophy from that embodied in the former rules and in the propositions identified in Fancourt.  Wilson J considered this new rule in Foodco ... and found guidance in the approach taken ... in Swain ... This statement by Lord Woolf is clearly consonant with the philosophy of the UCPR ... which underpins the change in approach reflected in the new rules.”

23. I would respectfully disagree. In my opinion summary judgment is not to be given, either to defendant or plaintiff, except where it is just to do so and it will not be just to deprive a party of a trial unless it can be seen that their case is hopeless, or bound to fail. Unless that can be said of it, the conclusion cannot be reached that a claim or defence has no “real” prospect of success.

24. For the reasons given by McMurdo J I agree that the appellant’s case cannot be said to be bound to fail. I agree with the orders proposed by his Honour.

25. McMURDO J:  The appellant was one of several plaintiffs who instituted proceedings in 1995 in this court against the National Crime Authority (“NCA”), complaining that a large amount of material taken in execution of a search warrant was unlawfully seized.  The case was not prosecuted and was ultimately dismissed in 2001, when the appellant and others were ordered to pay to the NCA its costs on an indemnity basis.  As a result the appellant had to pay $75,000 to the NCA.

26. The appellant claims that it was the respondent’s fault that he became a party to the case and was ultimately ordered to pay the NCA’s costs. He contends that the respondent, a practising barrister, advised him that he was duty bound to support the case of the other plaintiffs by becoming a plaintiff. He says that this advice was not only wrong, but also negligent, misleading or deceptive and involved a breach of a fiduciary duty allegedly owed to him by the respondent. In May 2003 he issued proceedings in the District Court against the respondent, in which he claimed damages for negligence and under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1989.  The respondent filed a defence and promptly applied for summary judgment.  The appellant then applied to amend to add a claim for equitable compensation for breach of fiduciary duty.  The applications were heard together.  The appellant was refused leave to amend and the respondent was given judgment in the proceedings.  This is an appeal against that judgment and an application for leave to appeal the refusal of the amendment.

The proceedings against the NCA

27. The appellant was and is a practising solicitor. In 1995 he practised under the name of Gray & Maloney. His practice was largely in commercial and property matters and not in litigation or criminal law. His clients included Allan Barrow and Wei Yan Yu and a number of their companies. He held several files on their matters. Mr Barrow was the subject of investigation by the NCA in relation to drug offences, and in February 1995 he was arrested and charged. Mr Barrow, Ms Yu and some of their companies were then sued under the Crimes (Confiscation of Profits) Act 1989.  In April 1995 a search warrant was issued which authorised the search for and seizure of material from the appellant’s office in Brisbane.  The warrant was executed on 11 April 1995 and files and other documents were seized.  The warrant specifically excluded material for which there was a proper claim for legal professional privilege.  There was a claim of privilege and, in accordance with the then protocol, the material was deposited by the NCA with the Registry of the Supreme Court.  Mr Barrow, Ms Yu and others involved in the criminal and proceeds of crime matters retained another solicitor, Mr O'Gorman.  They instructed him to bring proceedings against the NCA and others to challenge the seizure of the material, upon the basis that it was privileged and upon further grounds.  Those proceedings were commenced in about June 1995.  The plaintiffs were Mr Barrow, Ms Yu and their companies, together with their accountant (as the alleged owner of some of the documents) and the appellant.

28. The respondent settled a statement of claim by all plaintiffs, including the appellant, which was delivered on or shortly after the commencement of the proceedings. By that pleading, all plaintiffs claimed declarations that certain documents and things were unlawfully seized and an injunction to require the NCA to cause them to be delivered up “to the solicitors for the plaintiffs” (meaning Mr O'Gorman’s firm). There was also within the prayer for relief, a claim for interlocutory injunctions to the effect of preventing access to the seized material. There were money claims, but they were made by the plaintiffs other than the present appellant. Those claims were for damages for trespass, detinue, conversion, conspiracy to effect an unlawful purpose or a lawful purpose by unlawful means, procuring a breach of contract and breach of statutory duty. There was also a claim by those other plaintiffs for equitable compensation. Whilst the pleading specifically excluded any claim for damages by the appellant, it did not dissociate him from the allegations of wrongdoing for which the other plaintiffs claimed damages.

29. It was pleaded that the documents seized were in the appellant’s lawful possession and they were “the lawful property of one or more of” the plaintiffs (including the appellant). No property was said to have been jointly owned. The pleading did not distinguish the property of one plaintiff from that of another. Had this case proceeded to a trial it would have been necessary for each plaintiff to have proved its specific entitlement to some of the property which had been seized. In that event, no monetary claim by any of them would have been assisted by the joinder of the appellant as a plaintiff. No other plaintiff could have recovered damages for conversion of the appellant’s property and nor would the appellant’s joinder have assisted another plaintiff in suing for the conversion of its property. Similarly, the joinder of the appellant was neither necessary for nor beneficial to the recovery by another plaintiff for damages for trespass to any item seized. The entitlement of another plaintiff to damages for trespass would have depended upon whether that plaintiff was in constructive possession of the relevant item when it was found at the appellant’s premises in execution of the warrant.

30. Nor was the appellant a necessary party to the claim for declaratory relief. Upon this appeal there was no dispute that at least one other plaintiff, Mr Barrow, had standing to claim declaratory relief in relation to everything which was seized, on the basis that he was the subject of the relevant criminal investigation see e.g. Bartlett v Weir (1994) 72 A Crim R 511.    The appellant was an appropriate but not a necessary party to that claim.  As to the claim for a mandatory final injunction for the delivery up of the seized material, the appellant was a relevant party because some part of the files taken from his office was likely to have been material belonging to him rather than to his clients.  But any concern that the claim for delivery up of the seized material might fail for want of parties could have been met by the joinder of the appellant as a defendant.  In any case, the practical necessity for an injunction, once there was a declaration against the NCA that its seizure was unlawful, is not apparent.  The seized documents had been deposited in the Registry of the Supreme Court and there is nothing to suggest that the NCA would have sought an order for the return of any document in the face of a declaration that it was not entitled to have seized it, or that had it sought such an order, there was some prospect of its being made.  Bartlett v Weir illustrates the sufficiency of a declaration in this context.  And for the same reason that Mr Barrow had standing to seek a declaration, his interest was sufficient to seek injunctive relief: Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 493; Onus v Alcoa of Australia Ltd (1981) 149 CLR 27.  One consequence of the proceedings being constituted as they were and of the terms of the statement of claim was that the appellant became a party to the pleaded allegations of serious misconduct by the NCA, including the allegation of a conspiracy to achieve an object by unlawful means.  That was a matter of some importance to the judge who ordered the appellant to pay the defendants’ costs on an indemnity basis.

The appellant’s version

31. The appellant says that on some day prior to the commencement of these proceedings, Mr O'Gorman telephoned him and said that he had instructions to act for Mr Barrow and others to bring proceedings to recover the material which had been seized and deposited in the Registry. He says that Mr O'Gorman told him that the appellant, as Gray & Maloney, was a necessary plaintiff and that he should speak with the respondent as to why that was so. It is common ground that there was a telephone discussion between the appellant and the respondent not long before the commencement of the proceedings, in which the respondent told him that his firm was a necessary party. The appellant says that a reason given by the respondent was that from the duty of confidence owed by his firm to the clients involved, there was a duty to assist them in protecting the confidentiality of privileged documents which were seized, so that (by implication) the appellant was bound to assist by being a plaintiff in these proceedings. The appellant says that he told the respondent that he wished to avoid becoming involved and that he was concerned that he might be liable for any costs of the proceeding. He says he requested that his firm not be a party to any claim for damages “or other substantive relief” and that its only involvement would be nominal in nature and then only as was strictly necessary in connection with recovering possession of the clients’ documents.

32. The appellant says that he then telephoned Mr O'Gorman and related to him his conversation with the respondent, and that he “understood that the proceedings would be instituted naming Gray & Maloney as a plaintiff on the basis of this discussion, but I thought that its involvement would be technical or nominal and would be limited as agreed with Mr Morris and communicated to Mr O'Gorman”. He says that in this discussion he raised the question of an indemnity from his co-plaintiffs, saying to Mr O'Gorman that he required such an indemnity although he believed that he was not at risk of being liable to the defendants for substantial costs because of his limited involvement. As it happened, the proceedings were commenced without such an indemnity being provided. The appellant says he did not pursue the indemnity because he believed that his exposure for costs was small and also because the matter was soon overtaken by the progress of criminal proceedings against Mr Barrow. On the appellant’s version, the indemnity “was not expressed to Mr O'Gorman to be a condition of my agreement to allow Gray & Maloney to be named as a plaintiff. On the basis of the advice given to me by Mr Morris, I considered that I had a duty to permit Gray & Maloney to be named as a technical or nominal plaintiff”.

33. To the extent that the appellant’s version was disputed by the respondent’s evidence, that dispute was not one which could have been appropriately resolved on an application for summary judgment and the learned primary judge was to proceed upon the premise that the appellant’s version was correct.

Outcome of the NCA proceedings

34. By March 1996, the appellant was looking to extricate himself from the proceedings. Mr O'Gorman’s firm had by then withdrawn as solicitors for the plaintiffs and they were no longer legally represented. He wrote to the Australian Government Solicitor offering to discontinue on the basis that the defendants did not seek costs from him. The defendants did not agree and for some years there were occasional exchanges between the appellant and the Australian Government Solicitor in which he unsuccessfully tried to persuade the defendants to agree to his discontinuance with no order as to costs. The appellant was represented on a gratuitous basis by the firm of which he is now a partner. A further impediment to his withdrawal came from the fact that allegations of impropriety remained pleaded on behalf of all plaintiffs, including the appellant, which the defendants required the appellant to expressly disclaim. The defendants also told the appellant that he could not discontinue without the consent of the other plaintiffs or an order of the court, for which the appellant never applied.

35. Ultimately the proceedings were set down for trial in April 2001, when consent orders were made disposing of the proceedings, save for the question of the appellant’s liability for costs. Those orders included declarations, recording the plaintiffs’ agreement that all of the documents had been lawfully seized and some were not subject to legal professional privilege. There were orders made for the Registrar to deliver certain documents to the solicitors for the plaintiffs and others to the defendants. There was also a consent order that the plaintiffs, other than the appellant, pay the defendants’ costs of the proceedings upon an indemnity basis. The appellant then appeared by a solicitor who made submissions as to why costs should not be ordered against Gray & Maloney. On 11 May 2001, White J ordered the appellant to pay the defendants’ costs on an indemnity basis. In her reasons her Honour was strongly critical of the appellant for being a party to the conduct of proceedings involving serious allegations of impropriety and unlawful conduct which, in her Honour’s judgment, the appellant could not have thought were true and which were unnecessary to further any claim to legal professional privilege. Her Honour also concluded that the appellant could have brought the “true issue”, which she said was the claim for legal professional privilege to resolution much earlier and thereby saved considerable costs, adding that “by continuing to allow the name of the (appellant) to remain on the pleadings credence was lent to the allegations made by the first to fifth plaintiffs”.

The appellant’s case

36. The appellant says that he was wrongly and negligently advised that he should be joined in those proceedings. The advice is said to have been misleading and deceptive. He alleges that his case was negligently pleaded because the pleadings did not sufficiently dissociate him from the pleaded allegations of impropriety and unlawful conduct. He says that his causes of action accrued when he was ordered in May 2001 to pay the NCA’s costs. In the proposed equitable claim he would plead that the respondent’s alleged advice was given in breach of a fiduciary duty owed to him, which conflicted with that owed to his co-plaintiffs and that he should have been told to obtain advice elsewhere on the matter.

37. His case of misleading and deceptive conduct relies upon the same acts or omissions which are the subject of his negligent advice claim. He contends that the respondent’s advice was given in trade or commerce, and in relation to the Fair Trading Act, that it was given to him as a “consumer” in the sense relevant for that Act.

The respondent’s defence

38. The respondent denies that he owed to the appellant any duty of care or fiduciary duty. If either duty was owed, he denies any breach. In particular he denies that any advice he gave was wrong, let alone negligent. He maintains that the appellant was indeed a necessary party to the proceedings. The respondent strongly disputes that the appellant’s loss was relevantly caused by any advice from him, arguing that his liability for costs came from his own misconduct of his case. Further, he says that any claim was time barred by the commencement of the proceedings against him. There is also an issue as to whether the respondent acted in trade or commerce in giving any advice to the appellant, as there is as to whether the appellant was a consumer.

The decision in the District Court

39. His Honour concluded that the negligent advice case had no prospects, reasoning that the merit of the advice had to be considered in the context of the instructions and information provided to counsel. He said:

“In 1995 the plaintiff had been a solicitor for twenty-two years.  He would have had, it seems to me, a clear understanding that counsel advise, in circumstances such as we are discussing here, on the basis of instructions received from their clients – those instructions often being in the form of written statements prepared by the solicitor for the client who briefs counsel with those statements.  The duty of care, assuming that it existed, must be a duty to advise with care in all the circumstances, which must include the information provided to counsel.  Merely to show that advice given was ‘incorrect’ is not, in my view, to demonstrate negligence.”

It is not clear whether his Honour did conclude that an advice that the appellant was a necessary party was incorrect.  Nor was it explained why the particular content of the instructions and information provided to counsel could have made it reasonable for him to advise that the appellant’s joinder was necessary.  And although the content of the instructions and information provided to counsel was thought relevant to whether the advice was negligent, his Honour was able to conclude that there could not have been negligence whilst his Honour did not discuss the particular instructions or information in fact provided.

40. As to the pleaded allegation that “… the defendant owed to the plaintiff a duty to exercise reasonable skill and care … to ensure that Gray & Maloney was not subject to an adverse costs order …”, his Honour saw that as an allegation “that the defendant was under a duty to ensure a result for the plaintiff”, and upon that understanding of the appellant’s case, his Honour concluded “that there is no realistic prospect of the plaintiff’s persuading a court that counsel, in effect, guarantees a result for a client”. His Honour did not discuss whether reasonable skill and care had been used in the drafting of the statement of claim, having regard to the potential for an adverse costs order against the appellant from his being a party to serious allegations of impropriety which were not certain to be accepted.

41. As to a barrister’s immunity from the negligence suit, his Honour observed that, on the respondent’s case, there was no advocate-client relationship with the appellant so that “… it cannot be said that the defendant must succeed because of the so called advocate’s immunity principle”.  His Honour did not consider the potential operation of the immunity upon the premise of the appellant’s case that there was an advocate-client relationship.  That was because his Honour could not see how it could be said that the respondent was in the position of a legal adviser to the appellant, as he said in concluding that the proposed claim for breach of fiduciary duty was also bound to fail.

42. The primary judge concluded that the respondent was not engaging in trade or commerce in advising the appellant, because the appellant “offered nothing and paid nothing (nor was any remuneration sought from him) in respect of his discussions with the defendant”. He made the same comment in relation to the claim under the Fair Trading Act and further concluded that the appellant was not a consumer, because any advice was for the purpose of a business which the appellant conducted, which was his legal practice.

43. As to whether the claims were time barred, his Honour inclined to the view that they were on the basis that the appellant suffered loss and damage from the time that he became a party and susceptible to an order for costs. But after referring to Wardley Australia Limited v The State of Western Australia (1992) 175 CLR 514, he was not persuaded that the case was bound to fail on this ground.

44. His Honour therefore held that there was no real prospect of any part of the claim succeeding, and that there was no reason why it should be tried.

Rule 293

45. The principal question on this appeal then is whether the primary judge was correctly satisfied of the matters in UCPR r 293(2) which provides:

“(2)If the court is satisfied –

1. the plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claim; and

2. there is no need for a trial of the claim or the part of the claim;

the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”

46. In Bernstrom v National Australia Bank Limited [2003] 1 Qd R 469, it was said at 475 that “This new rule results, not only in a change in terms, but also reflects a change in the philosophy from that embodied in the former rules and in the propositions identified in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99”.  Before r 293, there was no rule by which summary judgment could be given for a defendant.  But in relation to summary judgment for a plaintiff, there was a change from the terms of previous rules^[1] to r 292, and each of rr 292 and 293 requires the court to be satisfied that the party against whom judgment is sought has no real prospect of success and that there is no need for a trial.  So in that way there is a change from the words of previous rules.  With respect to those who may have expressed a different view, it seems to me that rr 292 and 293 should be applied by reference to their clear and unambiguous language, without a need for any paraphrase or comparison with a previous rule.  But in the application of the plain words of rules 292 and 293, and in particular the consideration of whether there is a need for a trial, a court must keep in mind why the interests of justice usually require the issues to be investigated at a trial.  In my view it surely remains the case, as Mason, Murphy, Wilson, Deane and Dawson JJ said in Fancourt at 99, that “The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried”.  That remains a forceful and authoritative guidance and is in no way in tension with the application of these rules according to their own terms.

Consideration of the appellant’s case

47. An issue which affects much of the argument is whether the relationship between the parties was that of client and barrister. Although the respondent settled a statement of claim on behalf of all plaintiffs, including the appellant, he says that he was not the appellant’s barrister, at least in the sense of owing the appellant any duty. The respondent says that in the critical telephone conversation prior to the NCA proceedings, he said to the appellant that although “technically” he would be acting for the appellant’s firm in the proposed proceedings, the appellant should consider his own position, or seek independent advice, regarding his potential liability for costs. In his letter to the appellant of 4 September 1996, the respondent wrote that:

“The fact is that I was originally retained by Messrs. Robertson O'Gorman, specifically on behalf of Mr. Barrow.  It was my recommendation that your firm should be a plaintiff in the proposed Supreme Court action.  However, as I understand the situation, your firm never formally retained Messrs. Robertson O'Gorman to act on your behalf.  At Terry O'Gorman’s request and with his permission, I discussed issues with you directly.  However, I felt that in discussing issues with you directly, I was doing so in my capacity as counsel retained by Messrs. Robertson O'Gorman on behalf of Barrow and his companies.”

On the respondent’s case then, he did not see himself as giving advice to a client when he had the relevant conversation with the appellant.  He argues that his understanding is consistent with the absence of any “formal” retainer by the appellant of the respondent’s instructing solicitors, or any fee charged to or paid by the appellant.  However, the respondent was undoubtedly the appellant’s counsel when he settled the appellant’s statement of claim.  This was done shortly after the relevant conversation and was clearly a consequence of it.  The effect of what the respondent said to the appellant, even on the respondent’s version, was that the appellant should agree to be joined as a plaintiff in proceedings in which the plaintiffs would be represented by Mr O'Gorman’s firm and the respondent.  In these circumstances, it is at least arguable that the relationship was one of client and barrister at the time of the relevant conversation.  But if it was not, it had very arguably become so by the time the statement of claim was settled, at which point the respondent owed to the appellant the well defined duties of a barrister to a client.  To some extent the proper characterisation of the relationship could turn upon precisely what was said between the parties, and conceivably between one of them and Mr O'Gorman.  In my view, there is a real prospect that the appellant could prove that the respondent owed to the appellant the normal duties of a barrister to his client.  For the purposes of this summary judgment application, the various arguments should have been considered upon that premise.  Accordingly, cases such as Fish v Kelly (1864) 17 CB(NS) 194; 144 ER 78 do not provide a sufficient answer to the appellant’s case in the context of an application for summary judgment.

48. In my view the primary judge should not have concluded that the negligence claim had no prospects without considering at least two issues. The first is whether the advice was at least arguably wrong. Without assessing that matter, I do not see how the appellant’s prospects of proving that the advice was negligent or misleading could have been assessed, or how it could have been concluded that the appellant had no such prospects. Secondly, the primary judge had to consider whether the NCA proceedings could have been differently pleaded if the appellant was to be included as a plaintiff. Neither of those issues was considered by his Honour. Further, although his Honour said that the advice and pleading might be the result of certain instructions and information provided to the respondent, his Honour concluded that the respondent could not have been negligent although his Honour did not find what instructions or information had been given. To the extent that the content of instructions and information could affect whether the respondent was negligent, there would be a need for a trial before the facts could be found. In these respects then, in my respectful view, his Honour erred in his consideration of the prospects of the negligence claim.

49. As appears from what I have already said at [29] and [30] of these reasons, it is my view that the appellant was not a necessary party to the NCA proceedings. The other plaintiffs, and most particularly Mr Barrow, had sufficient standing to seek declaratory relief, and if necessary, injunctive relief. The common law actions for damages required those other plaintiffs to prove their respective interests and entitlements. It is not to the point that only the appellant could have claimed damages for an interference with his proprietary or possessionary rights, because the appellant told the respondent he did not wish to sue, for damages or otherwise, and an action by him for damages was expressly disclaimed in his pleading. Nor was the appellant a necessary party to proceedings which were brought to protect his clients’ privilege. It was of course their privilege and they did not need their former solicitor as co-plaintiff to establish such privilege as existed in any of the documents which had been seized.

50. To say now that the advice was incorrect is not to say that necessarily it was negligent. But the present question is whether the advice, if incorrect, could not have been negligent. In my view it cannot be concluded that reasonable care and skill was exercised without at least a trial to investigate factual issues such as the precise content of the respondent’s instructions and his particular consideration of the legal principles affecting whether the appellant was a necessary party.

51. As to the pleading of the NCA proceedings, it is arguable that the appellant could have been more clearly distanced from the allegations of impropriety made on his behalf. If that was not possible, then it would tend to fortify the appellant’s case that the advice was negligent or his proposed case of a breach of fiduciary duty.

52. In my view, there is a negligence case which has a real prospect of success, putting on one side the question whether it is actionable having regard to a barrister’s immunity from some claims in negligence. As I have said, his Honour dismissed the relevance of an advocate’s immunity from a negligence claim, because he concluded there was no advocate client relationship. On this appeal, the immunity is not raised as an alternative ground for upholding the summary judgment. If this appeal is allowed, the operation of the immunity in this case might have to be determined by the trial judge. In particular the trial judge might have to consider whether the advice was sufficiently connected with the preparation and conduct of proceedings as to be not actionable.^[2]

53. The claims under the Trade Practices Act and the Fair Trading Act each requires the appellant to establish that the relevant conduct was not only misleading or deceptive, but occurred in trade or commerce.  For the reasons I have given in relation to the negligence case, the respondent’s advice, at least if it was given as the appellant alleges, was at least arguably misleading or deceptive.  In Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 220, French J said that:

“where the conduct of a profession involves the provision of services for reward … there is no conceivable attribute of that aspect of professional activity which will take it outside the class of conduct falling within the description ‘trade or commerce’.”

The respondent did not render a fee to the appellant for any of the NCA proceeding.  Possibly he did not charge any fee to any other plaintiff for this advice, although the evidence is not clear.  He was retained by Mr O'Gorman for reward, and it was in that context that he spoke to the appellant.  As I have said, for  the present there is an arguable case that there was a barrister and client relationship, in the course of which the advice was given.  There is a difficult issue of whether the provision of legal advice in a professional context is conduct of a trading or commercial character so as to be within trade or commerce, a question which was extensively discussed by Santow J in Prestia v Aknar (1996) 40 NSWLR 165 but which is not yet the subject of settled authority.  Nor is it settled whether on the proper interpretation of s 52 and s 82 of the Trade Practices Act a barrister who is immune from a negligence claim is liable under the Act for the same conduct: see Boland v YatesProperty Corp Pty Ltd (1999) 74 ALJR 209; 167 ALR 575 per Callinan J at [365].  If the appeal should be allowed in relation to the appellant’s other claims, then as the addition of a claim for damages under the Trade Practices Act would not substantially add to the cost or length of these proceedings, the appeal should be allowed on terms which allow the appellant to prosecute also that claim.

54. The alternative claim under the Fair Trading Act appears to serve no purpose beyond that under the Trade Practices Act.  Counsel for the appellant could not suggest how the claim under the Fair Trading Act could succeed if that under the Trade Practices Act did not.  In addition, there is the need for the appellant under the Fair Trading Act to have been a consumer.  According to the definition of “consumer” in s 6, the appellant would have to have acquired the relevant services from the respondent “in a particular transaction, whether a separate contract or separate transaction within a contract”.  The respondent did not provide his services under a contract.  According to the terms of s 6(1), the appellant could not have acquired these services as a consumer.  The requirement for a contract is again apparent from s 6(4) in its reference to “the contract concerned”.  Although by s 6(5) the appellant’s status as a consumer must be presumed, unless the contrary is proved, in this case it is.  The claim under the Fair Trading Act has no prospects of success. 

55. The alternative equitable claim, for which his Honour refused leave to amend, is that the respondent should have offered no advice to the appellant, but instead he should have told him to take his own advice. His Honour dismissed the prospects of this claim, because he could not see how the respondent had placed himself in the position of legal adviser to the appellant. It follows from what I have said already that in my view his Honour erred in that respect. Once the case is considered upon the premise of the appellant’s version being correct and that advice was given to the appellant, there is at least an arguable case that the respondent should not have advised the appellant because of the potential conflict between the appellant’s interests and those of his co-plaintiffs.

Causation

56. It was strongly argued for the respondent that the appellant could not hope to prove a sufficient causal connection between the conduct complained of and his being ordered ultimately to pay indemnity costs. In her reasons for ordering indemnity costs, White J was strongly critical of the appellant’s approach to the conduct of the NCA proceedings. By March 1996 he was looking to extricate himself from the proceedings, demonstrating that by then he considered himself no longer obliged to assist his former clients. On his version, he was not sufficiently interested in the case to have read his own statement of claim. But he was aware that serious allegations had been made on his behalf because the Australian Government Solicitor was demanding an express withdrawal of them. Her Honour’s judgment gives a strong impression that it was his conduct from 1996 onwards which caused the order to be made against him. On this issue the appellant’s case seems relatively unattractive, for on one view he is seeking to be indemnified against a liability which has substantially resulted from his own misconduct of proceedings.

57. Against that however, the difference must be kept in mind between the present context, which is his claim for damages or equitable compensation, and the context in which White J gave her reasons, in which the relevant interests to be considered were those of the appellant and the NCA. And it is unnecessary for the appellant to show that his loss was solely caused by the respondent’s conduct; he need establish only that it was one effective cause. This is a factual question, for which a “but for” test is not definitive but is a question into which considerations of policy and value judgments enter: March v E & M. H. Stramare Pty Ltd (1991) 171 CLR 506.  It plainly enough appears that the appellant became a party to the case as pleaded against the NCA, and a party in whose name the pleaded allegations of impropriety were made, in consequence of what the respondent said to him and pleaded on his behalf.  The question is whether it is so clear on what is presently known of the facts that the only cause of his loss was his own conduct from 1996 onwards, in not seeking to undo that which he had been advised to do or which had been done by the respondent on his behalf.  In my view, it is not; and his claims have real prospects of success despite this issue.

58. It is also argued that the appellant’s loss came from his not insisting upon an indemnity from his co-plaintiffs before he sued, or from the proceedings being commenced without his instructions, if his instructions were to agree to his joinder only if an indemnity was given. On his case, they were not his instructions. If his case is accepted, it will be found that he was told, in effect, that he was bound to lend his name to these proceedings, whether or not an indemnity was provided. If he makes out his case, the necessary causal link is not denied by his not having insisted upon the indemnity. And, again, it is unnecessary for him to prove that the matters of which he complains are the sole cause of his loss.

Limitation Period

59. The argument is of the kind which arose in Wardley Australia Ltd v Western Australia.  Upon the appellant’s case, he could not have sued the respondent until he was ordered to pay costs in the NCA proceedings, because until then there was a mere prospect of some loss.  By joining in the proceedings, he was immediately exposed to the prospect of loss if a contingency was fulfilled, the contingency being an order for costs against him.  Until he was ordered to pay costs, of course, the appellant was under no obligation to pay them.  Although the usual price for discontinuance is the payment of the defendant’s costs, it was not inevitable when he sued that he would have to pay those costs, nor was it inevitable by the time he began to explore discontinuance in correspondence with the defendant’s solicitor.  An order for costs could have come from the exercise of a broad judicial discretion either under the former O 30 r 2 or UCPR r 307(2).  The circumstances of his becoming a party to the NCA case were unusual and provided a basis for arguing that he should be allowed to discontinue without paying costs.  Had he been allowed to do so, he would have suffered no loss.  A costs order was not inevitable when the NCA proceedings commenced, and nor was it inevitable as soon as the appellant sought to extricate himself from the NCA case.

60. In Wardley, Mason CJ, Dawson, Gaudron and McHugh JJ emphasised the undesirability of deciding limitation questions of this kind in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases.^[3]  If a point was reached where a costs order against the appellant was inevitable, it is a factual question as to when that point was.  That is a question which would require a trial, because the present evidence does not answer it.  It is not established that it was reached early enough for it to matter to any period of limitation.

61. Accordingly, the judgment cannot be supported on the basis that the claims are statute barred, and nor could the proposed equitable claim, for which a limitation period could be applied by analogy, be defeated on this basis.

Conclusion

62. In my view, the primary judge erred in holding that the appellant had no real prospects of success upon his pleaded case or the case for which he sought leave to amend, other than the claim under the Fair Trading Act.  The appeal should be allowed and the judgment below set aside.  The appellant should have leave to amend in accordance with his application filed 13 June 2003 or as he may be advised. The appellant’s claim for relief under the Fair Trading Act should be dismissed.  The respondent should pay the costs of this appeal and the application for leave to appeal, as well as the costs of the respondent’s application for summary judgment.  The order for costs made below should be set aside.  That will leave each party to bear his own costs of the appellant’s application for leave to amend.  Although that application was required because the appellant had failed to make that claim originally, the extent of the costs of that application must have been greatly increased by the extensive opposition to it.