Lavars v Gillis

1. [1]

   The plaintiff sues the defendants, a firm of solicitors, in respect of a retainer she had with them between 2009 and 2012. The plaintiff had been an employee with St George Bank. When St George Bank and Westpac merged, the plaintiff’s employment with St George was terminated on 8 December 2009. The solicitors were retained to act for her when disputes arose with regard to her employment, and ultimately to act for her when her employment was terminated.

2. [2]

   Proceedings were commenced in the Federal Court on 15 January 2010. The solicitors also acted for a number of other employees in a similar position to the plaintiff.

3. [3]

   Various offers were exchanged between the plaintiff and Westpac to settle the Federal Court proceedings. Ultimately those negotiations did not produce a settlement. On 14 October 2014 the Federal Court gave judgment generally in favour of the plaintiffs. All of the proceedings were heard together.

4. [4]

   On 14 March 2016 an appeal by Westpac to the Full Court of the Federal Court was allowed in part and the present plaintiff was required to pay a part of Westpac’s costs.

5. [5]

   A significant aspect of the plaintiff’s claim against the solicitors concerns the exchanging of offers between the solicitors and those acting for Westpac in December 2011. The plaintiff alleges that she was not informed of all of the offers made, that a counter offer was made by the solicitors without her instructions, and that she was not advised properly or at all of the costs consequences of rejecting offers made by Westpac. She also alleges that the solicitors had a conflict of interest because they were acting for a number of other parties in a similar position, and it was a condition of at least one of Westpac’s offers that all of the plaintiffs had to accept the offer made by Westpac to each of them for the offer made to the plaintiff to be effective.

6. [6]

   The plaintiff also has other claims against the solicitors in relation to costs she was required to pay related to the proceedings.

7. [7]

   Four of those other plaintiffs have also brought proceedings against the solicitors. Those plaintiffs are Corey Wittenberg, Louise Murphy, William Lawson and Stuart Moore (“the other plaintiffs”). The other plaintiffs are represented by one firm of solicitors but not the firm acting for the plaintiff. The claims made by each of the other plaintiffs are not identical with the claims made by the plaintiff but they have a number of common elements. Those elements relate to the negotiations in December 2011 between the solicitors on behalf of the plaintiff and the other plaintiffs, and Allens Arthur Robinson for Westpac.

8. [8]

   In the present proceedings, the solicitors (who I will hereafter refer to as the defendants), have served an affidavit by the first defendant. The plaintiff wishes to adduce evidence in response to that affidavit from Mr Wittenberg, Ms Murphy, Mr Lawson and Mr Moore.

9. [9]

   On 12 October 2018 the plaintiff filed a notice of motion seeking two separate orders. The first was that the Supreme Court proceedings commenced by her and by each of Wittenberg, Murphy, Lawson and Moore be heard together with evidence in one being evidence in the others. The second order was that the defendants produce documents in answer to a notice to produce served by the plaintiff on 18 September 2018.

10. [10]

    The notice to produce, served pursuant to UCPR r 21.10, sought production of a deed recording the terms of settlement between Elvio Bechelli and Westpac, and two deeds recording costs settlements between the defendants on the one hand and Lucky Poulos and Paul Smith respectively on the other hand. The defendants acted for those three persons in respect of their claims against Westpac. Mr Bechelli settled with Westpac. Messrs Poulos and Smith were two of the plaintiffs whose claims were determined in the judgment of the Federal Court.

11. [11]

    The notice to produce required production by 2 October 2018. The documents were not produced on that day, and in response to an email from the plaintiff’s solicitors on 3 October 2018 pointing out that failure, the defendants’ solicitors wrote saying that the documents sought were not relevant to the matters between the parties and were “clearly privileged communications”. The email invited the plaintiff’s solicitors to advise on the relevance of the documents and to say why they were not privileged.

12. [12]

    On 4 October 2018, the plaintiff’s solicitors wrote saying the following:

13. [13]

    Rule 28.5 of the Uniform Civil Procedure Rules provides as follows:

14. [14]

    The plaintiff does not seek that proceedings be consolidated (that would not be possible without leave because different solicitors act for the other plaintiffs) but simply that they be tried at the same time as the other proceedings with evidence in one being evidence in the others. The same solicitors act for Wittenberg, Murphy, Lawson and Moore. Those other plaintiffs support the plaintiff’s application, although no motions to that effect have been filed by them.

15. [15]

    In the Federal Court all five plaintiffs (and other claimants) were represented by the present defendants and the individual proceedings against Westpac were all case-managed and heard together. The judgments handed down at first instance and on appeal were all dealt with in the one judgment at each level.

Submissions

1. [16]

   The plaintiff submitted that, in relation to (d) above, on 15 December 2011, a “global” offer was made by Westpac, which involved certain sums being offered to each of the eight clients of the defendants (including the five current plaintiffs) on the condition that each offer was only capable of acceptance if all eight were accepted. The defendants responded to the “global” offer by saying that they had instructions from all eight clients to reject the offer. The five current plaintiffs allege that they provided no such instructions (Lavars Statement of Claim at [27C], Wittenberg SoC at [37], Murphy SoC at [46], Moore SoC at [47]).

2. [17]

   The plaintiff submitted that there is a central factual dispute in the five current proceedings about what advice if any was given to, and what instructions if any were received from, the defendants’ eight clients. The resolution of that factual dispute, it was submitted, would have implications for the allegations that the defendants breached the duty of care they owed each of the current plaintiffs. The plaintiff submitted that it may also have implications for the question of causation of loss in circumstances where Westpac’s offer was stated to be conditional upon all eight clients accepting.

3. [18]

   The plaintiff submitted that, if the five proceedings are not heard at the same time, then the five current plaintiffs and at least one of the defendants’ witnesses may be required repeatedly to give evidence about the same events. There is a risk, it is submitted, that if the proceedings are heard individually there might be conflicting findings.

4. [19]

   The plaintiff relied on s 56 of the Civil Procedure Act 2005 (NSW) to submit that:

5. [20]

   The defendants submitted that, despite the apparent similarity in the nature of the proceedings and the existence of some common issues of fact and law, the majority of issues that the court will need to determine are not in fact common issues. The defendants point to the following matters:

6. [21]

   The defendants submitted that evidence about advice given or not given to a different plaintiff as to their prospects of succeeding in their own case, cannot fairly be adduced by the plaintiff in order to prove or disprove whether Mr Gillis of the defendants made particular statements to her and whether those statements were or were not adequate to discharge the defendants’ duty.

7. [22]

   The defendants submitted that it is difficult to quantify the extent of savings in terms of cost and time if proceedings are heard together. There will be significant complexity associated with procedural and evidential rulings if the proceedings are to be heard together so as to ensure that the parties are not prejudiced by having otherwise inadmissible evidence adduced in a particular case. That would be challenging to the Court and to the parties.

8. [23]

   The defendants submitted that the orders proposed by the plaintiff give rise to a real risk of prejudice, noting that the plaintiffs’ cases largely turn on conversation between the individual plaintiffs and one of the defendants. Inadmissible evidence has already been referred to. A second matter is that forensic choices open to the defendants could be more limited. The defendants submitted, as an example, that it is only after a plaintiff closes his or her case that a defendant finally decides whether they are going into evidence and whether or not to call a particular witness. The defendants may wish to read an affidavit in one case and not another. That is a forensic choice currently open to them but would not be available were the cases to be heard together.

Legal principles

1. [24]

   In Humphries v Newport Quays Stage 2A Pty Ltd [2009] FCA 699, Besanko J said in respect of O 29 r 5 of the Federal Court Rules 2011 (Cth), an identical provision to UCPR r 28.5:

2. [25]

   That passage was quoted with approval by Austin J in Ghose v CX Reinsurance Company Ltd [2010] NSWSC 110 at [29].

Consideration

1. [26]

   In my opinion, four matters point strongly to the conclusion that the five proceedings should be heard together.

2. [27]

   First, and most significantly, is the commonality of the complaints regarding the December 2011 negotiations. To see the extent of the similarity of the complaints in that regard, it is necessary to set out the relevant parts of the pleadings.

3. [28]

   The plaintiff relevantly pleads as follows:

4. [29]

   In the proceedings brought by Corey Wittenberg, the following is pleaded with regard to the negotiations in December 2011:

5. [30]

   The defence to paragraphs 37-40 of Mr Wittenberg’s statement of claim is pleaded in the defence filed 14 May 2018 as follows:

6. [31]

   In the proceedings brought by Louise Murphy, she pleaded the following in relation to the December 2011 negotiations:

7. [32]

   In the proceedings brought by William Lawson, he pleaded the December 2011 negotiations as follows:

8. [33]

   In the proceedings brought by Stuart Moore, he pleaded the December 2011 negotiations as follows:

9. [34]

   The letter from Allens Arthur Robinson on behalf of Westpac dated 15 December 2011, referred to in each of the above pleadings, offered to settle all the claimants’ claims on the basis of payments set out in a table in respect of each of the claimants. The offers were inclusive of costs. The letter went on to say:

10. [35]

    The response from the defendants by email of 15 December 2011 at 9:52am was as follows:

11. [36]

    Mr Faulkner of counsel for the plaintiff described the December negotiations issue as the epicentre of the complaint. It should first be noted that the plaintiff and the other plaintiffs all make similar complaints in relation to the negotiations. The same negative propositions are pleaded by each plaintiff; for example, offers were not communicated or were not communicated for an inappropriate period of time. The truth of those propositions will have to be determined. They will involve credit findings.

12. [37]

    The issue of the correctness of the defendants’ email of 15 December 2011 at 9:52am will be an issue in all of the proceedings. The probability is that each of the plaintiffs would give evidence in all of the proceedings if they were heard separately. If the proceedings were heard separately, a credit finding would be necessary in relation to the defendant who forwarded the email of 15 December 2011.

13. [38]

    Whatever credit finding was made would mean that the subsequent proceedings could not be heard by the same judge. The same issue would arise sequentially in each subsequent hearing. The defendants accept that the necessity of credit findings would mean the cases would need to be heard by separate judges. That immediately gives rise to the potential for inconsistent findings on the same issue in each of the proceedings.

14. [39]

    Apart from the pleadings set out above, each of the plaintiffs alleges that, in acting for the plaintiff and the other plaintiffs, as well as the other claimants against Westpac, the defendants breached a fiduciary duty they owed to each of the plaintiffs. That position is said to arise because the defendants had a conflict of interest in negotiating with Westpac on behalf of all of them as a group. The breach of fiduciary duty is pleaded by the plaintiff at paragraph [27M(i)-(m)] and [27P]. It is pleaded in very similar terms by Wittenberg at [83], by Murphy at [97], by Lawson at [83] and by Moore at [84].

15. [40]

    Whether the conduct of the defendants amounted to a breach of fiduciary duty, and what resulted from that breach, would have to be decided in respect of each plaintiff. The same conceptual findings would need to be made for all plaintiffs even though the quantum of any damages for each would be different. The risk of inconsistent findings is such that it would be inappropriate to have the five proceedings heard separately.

16. [41]

    Secondly, the present claims all arise from the fact that the defendants represented all of the plaintiffs in proceedings which themselves were heard together in the Federal Court. In those proceedings there were common questions for determination arising from the employment of the plaintiffs and how that employment came to an end after the merger of St George Bank with Westpac, although the precise employment arrangements of each of the plaintiffs differed from the others.

17. [42]

    Thirdly, it is inconceivable that there would not be a saving in both time and cost if all five matters were heard in the one proceedings because evidence of events common to all proceedings would need only to be given once. That has a number of flow-on effects in terms of preparation time, court book production, cross-examination, opening and closing addresses, and a single judgment.

18. [43]

    Fourthly, unlike some applications for proceedings to be joined, the present application is made not by the common defendant but by the plaintiff. Where the joinder application is made by the defendant (see e.g. Ghose v CX Reinsurance Company Ltd [2010] NSWSC 110), a relevant consideration is that a plaintiff (or more than one plaintiff) will be obliged to take part in a longer trial than would be the case if that plaintiff’s proceedings were heard separately. The prejudice to that plaintiff is the additional time and cost where parts of the combined trial will not concern that plaintiff.

19. [44]

    In the present case, the only parties who are prejudiced in that way are the plaintiffs themselves, but they are the parties seeking the joinder. The defendant cannot be prejudiced in that way because the defendant’s involvement is in all aspects of the single trial or the multiple trials, whichever occurs.

20. [45]

    A subsidiary matter in favour of the proceedings being heard together is that the present proceedings are at a similar stage of preparedness as the proceedings brought by the other plaintiffs.

21. [46]

    I accept the point made by the defendants that each of the claims has issues peculiar to the particular plaintiff concerned. That is not a factor, when considered alone, which provides a basis for refusing to order proceedings to be heard together when the proceedings have some common factors and issues. Rule 28.5 is widely worded. The five proceedings involve a common question. The rights to relief arise partly out of the same transaction or series of transactions. On a broad view, the relief arises from the conduct of the defendants in acting for the various plaintiffs against Westpac. On a narrow view, it arises from the transactions that constituted the settlement negotiations in December 2011.

22. [47]

    The defendants submitted that complex questions of the cross-admissibility of evidence would arise if all of the proceedings were heard together, and that in itself would lengthen the proceedings or, at least, would mean that the time and cost involved in one trial would not be much less than that involved in five trials. In my opinion, this issue of cross-admissibility of evidence is overstated. There can be little doubt that in a separate trial of the plaintiff’s claims one or more of the other plaintiffs would be called, and indeed would need to be called on the issue of whether instructions were given to respond to the offer from Westpac of 15 December. Tendency notices might well be employed in a separate trial to justify evidence of similar events being given by the other plaintiffs. There may well be arguments about whether evidence was credibility evidence and whether it was admissible.

23. [48]

    In criminal trials involving multiple defendants, juries are given instructions that some evidence cannot be used against one or more accused but can be used against others. Judges are presumed to be able to disregard inadmissible evidence against a party, and the correctness or otherwise of their rulings are apparent from both the transcript and in the reasons for their judgment. These sorts of evidentiary issues frequently arise and can generally be fairly readily dealt with.

24. [49]

    The defendants pointed to forensic disadvantages that might arise at the close of the plaintiffs’ case. It was suggested that the defendants’ decision whether or not to call a witness or witnesses might be compromised by having to meet, in one trial, the evidence of a number of plaintiffs. I consider that this prejudice also is overstated, particularly in a case where allegations of negative propositions require answers from the defendants. Civil trials are no longer conducted by means of ambush. Witness statements or affidavits must be served in advance. Certainly, a defendant could choose not to call a witness if concessions were obtained from plaintiffs. A defendant’s witness could be called for a more limited purpose than had previously been thought necessary. If there ceased to be any contest on an issue or issues, cross-examination on those uncontested issues would likely no longer be relevant and, therefore, not admissible: Evidence Act 1995 (NSW) s 56(2).

25. [50]

    An order that evidence in one proceeding is to be evidence in another does not make evidence admissible which is otherwise inadmissible. For example, if tendency or coincidence was sought to be availed of, ss 97 and 98 of the Evidence Act would still need to be complied with. That matter will be made clear in the orders.

26. [51]

    In my opinion, r 28.5 is easily satisfied on the present application. The advantages of hearing the proceedings together significantly outweigh the disadvantages. I do not consider an order that the proceedings be heard together prejudices the defendants. It will save them costs, perhaps significantly. It means that all five proceedings will likely be determined more quickly than if they were heard separately, and it reduces the real risk of inconsistent findings being made in separate proceedings. It is consistent with s 56 of the Civil Procedure Act 2005 (NSW) that the proceedings should be heard together.

Notice to Produce

1. [52]

   There are two aspects to the notice to produce. The first concerns document (1) which is the settlement deed between Westpac and Mr Bechelli. The plaintiff submitted that the probative value of that document is that it goes to the willingness of Westpac to negotiate individually notwithstanding the terms of the letter from Allens Arthur Robinson of 15 December 2011.

2. [53]

   The second aspect concerns documents (2) and (3), which are settlement deeds between the defendants and the two named claimants in relation to a costs settlement. Those documents are said to be potentially relevant to the availability and willingness of those individuals to give evidence. There was a suggestion, although it was not clarified, that those two persons have indicated an unwillingness to assist the plaintiff in giving evidence.

3. [54]

   In relation to the deed with Mr Bechelli, the defendants submitted that the fact that there was a settlement with Mr Bechelli at some later time, perhaps in 2012, cannot assist in determining what if any individual offer Westpac made or might have made in December 2011, presumably, in the face of the letter of 15 December from Allens. The defendants submitted that if the plaintiff wants the evidence from that deed it could be obtained from other sources, perhaps, from Westpac. Counsel for the defendants took no point that the deed would be subject to any form of privilege, despite what had been said in correspondence.

4. [55]

   In relation to documents (2) and (3), the defendants submitted that if Messrs Smith and Poulos declined to provide affidavits, it was available to the plaintiff to subpoena them to give evidence. What was contained in the deeds, the defendants submitted, could not be relevant to any evidence that could be led from those persons or, indeed, to whether they would give evidence. The defendants submitted that there was a privilege issue with these documents because both Mr Poulos and Mr Smith were claiming privilege over the terms of those deeds.

5. [56]

   In my opinion, document (1) is capable of having relevance to the issue of whether Westpac would have settled with an individual plaintiff even if the other claimants did not settle with Westpac. If there are issues relating to the confidentiality of the amount of the settlement with Mr Bechelli, that issue can be dealt with. The significant matter is the fact of a settlement and not the amount of it. Document (1) should be produced.

6. [57]

   As to documents (2) and (3), I do not understand how production of those documents throws any light on the issue of Messrs Poulos and Smith giving evidence or what evidence they might give. If they have declined to provide affidavits it is open to the plaintiff to subpoena them to give evidence. A settlement those persons reached with the defendants concerning their costs does not appear to be relevant to any evidence that they could give in relation to the matters in the pleadings. The notice to produce should be set aside insofar as it requires production of documents (2) and (3).

Conclusion

1. [58]

   I make the following orders:

   1. (1)

      I order pursuant to UCPR r 28.5 that the present proceedings be heard together with proceedings 2017/352141, 2017/170694, 2017/346984 and 2017/370856.

   2. (2)

      The evidence in each of the proceedings is, subject to the rules of evidence, evidence in the other proceedings.

   3. (3)

      The defendants are to pay the plaintiff’s costs of the motion.