Rogers v Roche & Ors

Here, the Court of Appeal allowed an appeal against orders made striking out the appellant’s claims for breach of retainer, negligence and breach of fiduciary duty and the paragraphs of the Fresh Statement of Claim relating to those claims.  The case is important because it considers the application of the recent High Court decision in Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16 concerning the boundaries of advocates’ immunity. 

The rather complex background to the matter was as follows. Following a personal injuries trial the appellant was awarded judgment for $593,708.46, incorporating $480,000 for economic loss ($130,000 for past economic loss and $350,000 for future economic loss). [1]. The appellant regarded the award for economic loss as inadequate compensation for the economic loss he had sustained.  Consequently he initiated proceedings against the respondents, his former legal representatives, to recover the balance and for other relief.  He claimed damages for breach of retainer, negligence, and breach of fiduciary duty, a declaration that the first and second respondents were not entitled to the payment of fees they had charged, and consequential orders for repayment of those fees. [2]. Amongst other complaints, it was alleged that the appellant’s claim for economic loss was inadequately prepared at the PIPA stage. [12], [13].

The respondents sought to strike out parts of the Fresh Statement of Claim and the claim.  [3]. The primary judge ordered that the claims for breach of retainer, negligence and breach of fiduciary duty, and the parts of the Fresh Statement of Claim relating to those claims, ought be struck out as they were an abuse of process (see Lewis v Hillhouse [2005] QCA 316), effectively re-litigating an issue determined in the personal injuries judgment, and were not maintainable by reason of advocate’s immunity (see Giannarelli v Wraith (1988) 165 CLR 543 and D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. [4].  Critically, he also found that the appellant had not clearly alleged that he lost the chance of obtaining a higher award of damages by the respondents’ alleged breaches of retainer, negligence, and fiduciary duty. [17]. Further, he dismissed the argument that had the proper evidence been presented, a better outcome may have resulted. [19]. 

The appellant appealed against the orders below. [5]. 

Advocate’s Immunity

The decision below preceded the High Court’s judgment in Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16. That decision clarified the scope of advocate’s immunity, the court finding that whilst Giannarelli and D’Orta should not be overturned, the scope needed to be narrowed so that the principles therein did not extend to negligent advice regarding the settlement of a case.  The majority concluded that what determines whether immunity should apply is a “functional connection between the advocate’s work and the judge’s decision” (see [2016] HCA 16 at [5]–[6]). The case is authority for the principle that advocate's immunity does not apply to advice that does not help reach a judicial determination in court, but simply leads to an agreement between the parties to settle the dispute; or put differently, advocate’s immunity is not attracted by out of court work which does not progress the litigation towards a judicial determination. [26]. Importantly to this appeal, the majority concluded that advice not to settle in a case in which litigation proceeds to judgment after a trial is not protected by the immunity. [28].

Abuse of process

Central to the appeal was consideration of the test for abuse of process in a case in which a claim set up by one party to litigation had been denied in previous litigation involving that party and a person who was not party to the litigation already on foot: see Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [25]. See also Reichel v Magrath (1889) 14 App Cas 665 at 668 wherein Lord Halsbury said that “it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again. … [T]here must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure…”.

Alleged breaches of fiduciary duty relating to the retainer

The appellant’s case was, essentially, that the first and second respondents breached fiduciary duties they owed as his solicitors by prioritising their own interests over his. [33]. Referring to Sims v Chong [2015] FCAFC 80 at [87], he argued that advocate’s immunity does not apply to claims for breaches of fiduciary duty. [35].

The court agreed that advocate’s immunity was not applicable, stating: 

“The alleged conduct of the first and second respondents which is charged as breaches of fiduciary duty was not the work of an advocate.  It concerned the formation and continuing existence of the retainer of the first and second respondents, rather than any decision by them which affected the taking of any particular step in court.  The alleged conduct (including non-disclosures) did not have a direct or functional connection with the in court conduct of the appellant’s personal injuries claim.  The test for advocate’s immunity is not satisfied in relation to this part of the appellant’s claim.” [40]. 

In addition the court accepted the appellant’s submissions that no part of his claim amounted to a re-litigation abuse of process, [42] noting that the mere fact that a person against whom a re-litigation abuse of process is alleged was a party in two sets of proceedings and seeks to litigate an issue decided in the earlier proceedings does not in itself suffice to give rise to abuse of process: see Morgan v WorkCover Corporation (2013) 118 SASR 297 at [145] (5). See also Cleary v Jeans (2006) 65 NSWLR 355 where the New South Wales Court of Appeal endorsed decisions which had found that it was not an abuse of process for a litigant to sue the litigant’s solicitor to recover loss resulting from negligence which were not protected by advocate’s immunity.

His Honour Justice Fraser made these careful observations:

“It is an aspect of all parts of the appellant’s claim that he was deprived of a full opportunity of obtaining the entire amount of his economic loss by the wrongful conduct of the first and second respondents.  To shut out litigation of this part of the appellant’s claim would be more likely to bring the administration of justice into disrepute than would conflicting judicial decisions about the appellant’s economic loss reached upon different evidence.” [50].

Disposition

In the result the court determined that the primary judge had erred in finding that any part of the appellant’s claim was a re-litigation abuse of process. [51]. It was further held that advocate’s immunity impeded the appellant’s claim only to the extent of allegations of wrongful conduct by the respondents in relation to the preparation of his claim during the litigation stage, including alleged failures by the third respondent to inform the appellant about her alleged conduct in the preparation of the litigation. [65]. The ultimate result was that the appellant was entitled to claim that the first and second respondents did not perform their retainer (except in so far as that allegation referred to the alleged inadequacies in preparation of the claim during the litigation stage).  [66].

The appeal was allowed and the appellant was granted leave to file and serve an amended statement of claim. [69].