Liprini v McIntyre

1. [1]

   SIMPSON AJA: In these proceedings the plaintiff, Kevin Liprini, claims damages from his former solicitors, Redmond Hale Simpson (“RHS”) for what he alleges to have been a breach of their contractual obligations to him, and/or breach of their duty of care in the performance of legal services for which he retained them over a period of several years commencing in early June 2005. The plaintiff’s claims are set out in an amended statement of claim filed on 18 February 2015. The named defendants are five partners in RHS. The parties proceeded on the basis that the claim is governed by the Civil Liability Act 2002 (“the CLA”).

A brief synopsis

1. [2]

   The plaintiff’s claim arises out of a bitter dispute between himself and his younger brother, Dr Allan Liprini, which specifically concerns the estates of their parents who died in 2005 and 2006, each leaving a will that excluded the plaintiff and nominated Dr Liprini as executor and (in the case of the father’s will) a beneficiary; (in the case of the mother’s will) the sole beneficiary. Following the death of his father in 2005, RHS, on behalf of the plaintiff, commenced proceedings under Part 2 Division 1 of the Family Provision Act 1982 (“the FPA”, now repealed), claiming provision out of the estate. By s 7 the Court was empowered, in certain circumstances, to order that provision be made out of the estate of a deceased person for the maintenance, education or advancement in life of an eligible person. (The plaintiff was an eligible person). Those proceedings had not been finalised when the plaintiff’s mother died in November 2006. On 3 April 2007 the plaintiff instructed RHS to commence proceedings under the FPA, claiming an order for provision from her estate. No such proceedings were commenced. However, at a mediation that took place before a Registrar of the Court in relation to the estate of the father on 6 December 2007, at which the plaintiff was represented by RHS and counsel, the parties reached an agreement pursuant to which substantial provision was to be made in favour of the plaintiff. That provision was intended to encompass the mother’s estate as well as that of the father. The Registrar made orders in accordance with short minutes of orders formulated by the parties’ legal representatives.

2. [3]

   Notwithstanding his assent to the orders, Dr Liprini never made the payment to which he had agreed. A long process of litigation followed, culminating in the bankruptcy of Dr Liprini. Eventually, the plaintiff was paid a sum (less than the agreed settlement sum) out of Dr Liprini’s bankrupt estate.

3. [4]

   As ultimately presented, the plaintiff’s claim is that:

4. [5]

   There are some, although limited, disputed questions of fact. On the whole, the relevant facts and circumstances are not in issue and are largely documented.

The pleadings

1. [6]

   As pleaded in the amended statement of claim, the plaintiff alleged that RHS failed to provide legal services to the plaintiff in accordance with a reasonable standard of care, skill and diligence. He particularised his claim as follows:

2. [7]

   The plaintiff pleaded a claim for damages representing the lost opportunity of recovering the difference between the agreed settlement sum and the amount he had eventually recovered in Dr Liprini’s bankruptcy, and various costs he had incurred in the litigation that followed the settlement at mediation.

3. [8]

   The first to fourth defendants filed a joint defence. For some reason that is not apparent the fifth defendant (Michael Sommerville) filed a separate, but apparently identical, defence. The defences denied breach of contract or duty, and raised an issue concerning the causal connection between any established breach and any loss or damage suffered by the plaintiff. They asserted that the losses relied upon by the plaintiff were attributable to causes other than their representation of the plaintiff, specifically the conduct of Dr Liprini. They pleaded a defence under the Limitation Act 1969 (NSW) (later abandoned). They invoked s 5 0 of the CLA (which quarantines from liability professionals acting in a manner widely accepted by Australian peer professional opinion). They claimed that if they were found to be in breach of their duty, either counsel who represented the plaintiff at the mediation or Dr Liprini, or both, were, for the purposes of Part 4 of the CLA, concurrent wrongdoers, by reason of which the plaintiff’s claim is apportionable. They claimed immunity from suit under the doctrine known as “advocates’ immunity”: see, for example Giannarelli v Wraith (1988) 165 CLR 543; [1988] HCA 52; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12; Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16.

Factual background

1. [9]

   It is necessary now to set out in considerably more detail the relevant facts. Except where otherwise stated, the facts are uncontentious.

2. [10]

   The plaintiff is the elder of two sons of James Natale Liprini and Anne Mary Liprini. He was born in July 1947 and was 57 at the time of his father’s death in January 2005. His younger brother, Allan Liprini, was born in November 1948 and was 56 at that time.

3. [11]

   James Liprini began and for many years conducted a successful automotive business. At the age of 14 years and 6 months the plaintiff left school (he said at the insistence of his father) and undertook and then completed an apprenticeship in the business. Ultimately, on his father’s retirement in about 1976, he took over the management of the business.

4. [12]

   Allan Liprini undertook medical studies and graduated as a doctor. After some personal difficulties (which the plaintiff asserted included drug addiction and financial mismanagement) he established a medical practice.

5. [13]

   James Liprini made his last Will on 5 October 2001. He died on 21 January 2005. In his last Will he appointed Dr Liprini as the sole executor. He bequeathed to Dr Liprini a property at Helensburgh. He bequeathed the residue of his estate to his wife, Anne Liprini. James Liprini made no provision out of his estate for the plaintiff. He explained this in a declaration contained in clause 6 of the Will as follows:

6. [14]

   Early in June of 2005 the plaintiff sought the advice of RHS with respect to his exclusion from his father’s Will. Initially, he dealt with Mr Danny Simpson, a partner of RHS. Subsequently, from about 3 April 2007, Mr Michael Sommerville, by then also a partner in RHS, assumed responsibility for his affairs. Mr Simpson briefed a barrister, Mr Mark Lawson, to advise with respect to any claim the plaintiff might have had under the FPA with respect to his father’s estate. Mr Lawson’s advice was cautious as to the plaintiff’s prospects of making a successful claim.

7. [15]

   Probate of James Liprini’s Will was granted to Dr Liprini on 2 August 2005. An inventory of property showed that he was the sole owner of real estate valued at $840,000, deposits in bank accounts to the value of $331,498.85, and shares valued at $9,000. There was also some property (real estate and deposits in bank accounts) jointly owned with Anne Liprini. A property at Sylvania Waters (which I take to have been the family home) was held in a joint tenancy with Anne Liprini and appears to have passed to her by right of survivorship. (There was no clarity as to the nature of the tenancy). The total value of James Liprini’s estate was stated to be $1,180,743.65.

8. [16]

   Section 16(1)(b) of the FPA prescribed a period of 18 months from the death of the person in respect of whose estate an application for provision under s 7 is to be made for making the application. On 15 June 2006, RHS advised the plaintiff that any claim under the FPA had to be made by the end of July 2006. Notwithstanding Mr Lawson’s caution about the merits of a claim, a summons was filed on 18 July 2006, seeking orders for provision for the plaintiff under s 7 of the FPA. Both the plaintiff and Dr Liprini swore and filed affidavits in the proceedings, the plaintiff on 27 September 2006. In that affidavit he disclosed assets in excess of $1,378,000, liabilities of $641,494, and annual expenses of $146,000.

9. [17]

   On 19 October 2006 Dr Liprini, in his capacity as executor of the estate, filed an affidavit setting out the position with respect to James Liprini’s estate. He deposed that assets of the estate had been distributed. The property at Helensburgh had been, in accordance with James Liprini’s Will, transferred to himself, and a total of $658,586.20 had, in three tranches in 2005, been distributed to Anne Liprini. The then current value of the undistributed estate was approximately $30,000.

10. [18]

    That James Liprini’s estate had been substantially distributed was not fatal to the plaintiff’s claim. By Part 2, Division 2 of the FPA, the court was empowered to designate as “notional estate” property that had been disposed of by the deceased person within specified periods prior to death (and that satisfied stated criteria) or had been part of the estate and distributed. Property designated as notional estate was available to satisfy an order under s 7 for provision.

11. [19]

    On 26 November 2006 Anne Liprini died. Her last Will was made on 4 December 1996. She appointed Dr Liprini as sole executor, whom she also named as sole beneficiary. She also stated her reasons for omitting to make any provision for the plaintiff, in the following terms:

12. [20]

    An inventory of property showed total assets of $2,713,215.71, which included a balance of “estate monies” from the estate of James Liprini. The total of cash deposits in various bank accounts was $1,133,489. This inventory was provided to the plaintiff in March 2007. On 3 April 2007 he instructed RHS to commence proceedings in respect of Anne Liprini’s estate “the same as my Father’s Will …” It was at about this time that the plaintiff’s file held by RHS was transferred from Mr Simpson to Mr Sommerville. On 11 April, the plaintiff confirmed his instructions to commence proceedings. Mr Sommerville sought instructions from the plaintiff concerning the declarations in both Wills that the plaintiff had been given $1 million during James Liprini’s lifetime. On 8 May 2007 Mr Sommerville attended a conference with Mr Lawson. The plaintiff was not present. Mr Lawson advised:

13. [21]

    On 1 June 2007 Mr Lawson advised in respect of the plaintiff’s claim against James Liprini’s estate. He expressed himself to be “concerned” about the plaintiff’s prospects of success, having regard to the statement of assets and liabilities in his affidavit, and he made particular, and sceptical, reference to the plaintiff’s claimed annual expenses. He said that, subject to the plaintiff providing evidence of a “genuine need” for provision, he would be hopeful of arranging a mediation in the future with a view to settling the case for “a reasonably modest sum”. He did not quantify that sum. He identified further information it was necessary for the plaintiff to provide.

14. [22]

    Thereafter Mr Sommerville made periodic enquiries of Dr Liprini’s solicitors as to whether probate of Anne Liprini’s Will had been sought or granted. Although he appreciated that proceedings under the FPA could be commenced in the absence of a grant of probate, he preferred not to do so until probate had been granted. He was also making efforts to have the plaintiff provide current financial information and preferred not to commence proceedings until he had that information.

15. [23]

    On 9 July 2007 probate was granted. On 27 July 2007 the solicitors who had been acting for Dr Liprini notified RHS that they were no longer instructed. RHS attempted to communicate directly with Dr Liprini. Dr Liprini’s new solicitors did not advise RHS of the grant of probate until 5 December 2007.

16. [24]

    On about 4 September 2007, Dr Liprini, through his solicitors, sought the plaintiff’s consent to an interim distribution to him (Dr Liprini) of $20,000 (subsequently $90,000), he being in financial difficulties at that time. RHS advised the plaintiff to consent, which he did.

17. [25]

    The plaintiff made it clear that he expected to be awarded a 50% share of the value of the combined estates of James and Anne Liprini, and that he would accept nothing less. In a telephone conference on 23 November 2007, Mr Lawson advised that it was unlikely that he would achieve that result. Mr Lawson explained to the plaintiff that, in proceedings under the FPA, the determination was “needs based”. He advised him to settle for $100,000 - $150,000 and that, if he went to a hearing, his claim might fail altogether. Mr Sommerville conveyed Mr Lawson’s advice to the plaintiff by letter on 17 November. In a telephone conversation on 26 November, the plaintiff again stated that he would not accept those figures, and would prefer to mediate.

18. [26]

    On 25 September 2007 an order was made by the Court (by consent) for the FPA proceedings to be listed for mediation in the Supreme Court. At this time the only “FPA proceedings” were those in relation to James Liprini’s estate, no such proceedings having been commenced with respect to Anne Liprini’s estate. The mediation was fixed for 6 December 2007 before a Registrar of the Court. In November the plaintiff attended a conference with Mr Sommerville and Mr Lawson. There was discussion about the plaintiff’s financial position. From time to time thereafter Mr Sommerville sought information from the plaintiff concerning his assets and liabilities. He had some difficulty in obtaining that information.

19. [27]

    At the conference of 23 November, the plaintiff expressed suspicion concerning the death of Anne Liprini. He had earlier made claims that Dr Liprini was somehow involved in her death. He repeated that claim in the conversation of 26 November. He took steps to ensure that a coronial inquiry would take place. He then expressly suggested to Mr Sommerville that the pending coronial inquiry might be used as “lever” with which to exert pressure on Dr Liprini to agree to provision out of the estates of his parents. Mr Sommerville very properly and firmly rejected that proposition.

20. [28]

    Mr Sommerville continued his efforts to obtain information concerning probate of Anne Liprini’s Will. It was not until 5 December 2007 that Dr Liprini’s new solicitors advised that probate had been granted (although that had happened on 9 July of that year).

21. [29]

    At the mediation of 6 December 2007 the plaintiff was represented by Mr Sommerville and Mr Lawson. Dr Liprini was represented by solicitor and counsel. It is fair to say that the mediation was not easy. (Given the history recorded above that is hardly surprising). During the course of the mediation Dr Liprini’s legal representatives told Mr Sommerville that their client was having a nervous breakdown, and “[it] may all fall apart”.

22. [30]

    Although no proceedings in respect of the estate of Anne Liprini had been commenced, it is quite apparent, and not disputed, that all involved conducted the mediation on the basis that both estates were involved. For example, counsel for Dr Liprini began by stating the value of each estate - $580,000 in James Liprini’s estate (notwithstanding the affidavit stating that only $30,000 remained undistributed – the discrepancy is unexplained), $2.7 million in Anne Liprini’s estate. Given his affidavit evidence that only $30,000 of James Liprini’s estate remained undistributed, Dr Liprini’s requests for consent to distributions are consistent only with an appreciation that Anne Liprini’s estate was also in contest. The mediation proceeded on the basis that the total available for distribution was (approximately) $3.3 million – that is, including Anne Liprini’s estate.

23. [31]

    The offers made during the mediation also reflect that fact. The plaintiff made an opening offer of $1.6 million; Dr Liprini offered $100,000. Eventually, the plaintiff agreed to have Mr Lawson offer to settle for $750,000 plus costs. If that were not agreed, he said, “I’ll walk” (which I take to mean that he would abandon the mediation and litigate). What happened next is in dispute. Mr Sommerville’s version is as follows. The plaintiff asked:

24. [32]

    Mr Sommerville’s evidence was that the plaintiff remained present at the mediation until 1 pm when he left. Prior to leaving he gave instructions to settle on the basis that he received $750,000 as a legacy and $20,000 towards his legal costs. He made it plain that he would not move from those figures. After that conversation the plaintiff left the mediation.

25. [33]

    The plaintiff’s version, (given in his affidavit) of what happened is as follows:

26. [34]

    It is not in dispute that the plaintiff left the mediation before it was finalised. Mr Sommerville’s evidence (undisputed) was that Dr Liprini agreed to pay the plaintiff a sum of $770,000 inclusive of costs. He said that counsel for Dr Liprini raised the issue of a form of order that would bind both estates and there was some discussion about how this could be achieved.

27. [35]

    The result was that Mr Lawson and counsel for Dr Liprini prepared and signed short minutes of orders which were subsequently made by the Registrar. The orders were in the following terms:

28. [36]

    In his affidavit the plaintiff asserted that, following his departure, Mr Sommerville telephoned him and they had a conversation to the following effect:

29. [37]

    In oral evidence, the plaintiff made a correction to that evidence. He said that no reference to a period of 28 days to pay was made in that conversation, but that, on a later occasion (10 December 2007), Mr Sommerville advised him that the settlement sum was to be paid within 28 days.

30. [38]

    Mr Sommerville denies the terms of the conversation alleged: he specifically denies that the plaintiff asked what would happen if Dr Liprini did not pay, that he said that he (Dr Liprini) does not pay anyone, and that Mr Sommerville said “don’t worry Kevin, it’s set in stone.”

31. [39]

    As will be seen below, it is not necessary to resolve these factual disputes.

32. [40]

    Notwithstanding his agreement at the mediation, Dr Liprini failed to make any payment to the plaintiff. Mr Sommerville communicated from time to time with Dr Liprini’s solicitors, until Dr Liprini terminated their instructions on or about 4 February 2008. Mr Sommerville then attempted to communicate with Dr Liprini directly.

33. [41]

    On 3 March 2008 RHS filed a summons in the Equity Division of this Court seeking orders that Dr Liprini be dealt with for contempt, arising out of his failure to comply with the orders. On 13 May 2008, those proceedings were dismissed by Brereton J: Liprini v Liprini [2008] NSWSC 423.

34. [42]

    On 23 April 2008, on behalf of the plaintiff, RHS filed a second summons in the Equity Division, seeking:

35. [43]

    The summons came before Nicholas J on 9 July 2009. The following day, 10 July 2009, his Honour delivered judgment: Kevin Liprini v Allan Steven Liprini, unreported, 10 July 2009.

36. [44]

    Nicholas J considered that the proceeding before him was one to give effect to, or to enforce, the orders of 6 December, and that the outcome turned on the proper construction of those orders. He rejected an argument advanced on behalf of Dr Liprini that the effect of the orders was confined to the estate of James Liprini and did not extend either to Dr Liprini personally or to the estate of Anne Liprini. He considered that the language of the orders was “plain and unambiguous”, and that Dr Liprini had agreed to be bound to their implementation, that the intention of the parties was to resolve the claim in relation to James Liprini’s estate, as well as any potential claim against the estate of Anne Liprini, and that the parties proceeded on the assumption that Dr Liprini would take such steps as were necessary to honour the agreement he had made, which would involve drawing on the assets of Anne Liprini’s estate if necessary. He concluded:

37. [45]

    The significance of these orders and declarations cannot be overlooked. They confirm, if confirmation is necessary, that the estates of both James Liprini and Anne Liprini were involved in the mediation and bound by the orders there made. They confirm that the agreed orders were, and were intended to be, orders under s 7 of the FPA. It will be necessary to make further reference to these orders and declarations.

38. [46]

    The narrative should end there. Regrettably, it does not, and it is what happened – and what did not happen - thereafter that gives rise to the present proceedings. Dr Liprini continued to defy the orders. On 8 October 2009 he filed a Notice of Appeal in the Court of Appeal nominating the (agreed) orders of 6 December 2007 as the subject of the appeal. On 24 May 2010, on an application filed on behalf of the plaintiff, Allsop P summarily dismissed the appeal: Liprini v Liprini [2010] NSWCA 126. Pursuant to UCPR 51.58, Dr Liprini sought review of that decision. That application was dismissed on 28 June 2010 by Beazley and Giles JJA and Handley AJA: Dr Allan Stephen Liprini v Kevin Liprini [No 2], unreported, 28 June 2010.

39. [47]

    In June 2010 Dr Liprini filed two further notices of motion, each seeking review of the decision of Allsop P. Each was dismissed by the Registrar on 5 July 2010.

40. [48]

    In August 2010 Dr Liprini filed a notice of motion in the Equity Division, seeking an order that the orders of 6 December 2007 be set aside. That notice of motion was subsequently dismissed by consent, a trustee in bankruptcy by then having taken control of Dr Liprini’s financial affairs.

41. [49]

    In September 2009 RHS began the process of seeking a sequestration order under the Bankruptcy Act 1960 against the estate of Dr Liprini. There followed a course of skirmishing in the Federal Court and the Federal Circuit Court which it is not necessary to detail. Eventually, on 3 September 2010, a sequestration order was made. Dr Liprini appealed against that order, and filed an application for stay of any further proceedings. He later sought (on two occasions) annulment of the bankruptcy. On 5 December 2011, on the application of his trustee in bankruptcy, Dr Liprini was, under the provisions of the Vexatious Proceedings Act 2008 (NSW), declared a vexatious litigant: Pascoe v Liprini [2011] NSWSC 1484 per Adamson J.

42. [50]

    The plaintiff filed a proof of debt in Dr Liprini’s bankruptcy in the amount of $943,875, which was admitted. Ultimately, he received $458,764 from the estate.

43. [51]

    Naturally, the various manoeuvres (and I have detailed only a small proportion of them) taken by Dr Liprini caused the plaintiff to incur expenses. He includes these costs as part of the damages he claims against RHS. That is why it has been necessary to go into some detail about the events that post-date the mediation and the orders of Nicholas J.

The applicable law

1. [52]

   Part 1A of the CLA is concerned with negligence. Negligence is defined in s 5 as “failure to exercise reasonable care and skill”. Although the plaintiff’s case is pleaded in both contract and tort, its sole foundation in each case lies in the assertion that RHS failed to exercise reasonable care and skill in the provision of legal services to the plaintiff. By s 5A(1), Part 1A:

2. [53]

   In Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42 at [18] Gummow J, with whose reasons Heydon J agreed, stated five principles applicable to “the proper resolution of an action in negligence”. The five principles are:

3. [54]

   The passage in Shirt to which Gummow J referred is:

4. [55]

   The CLA proceeds on substantially the same basis. It was not in issue that RHS owed the plaintiff a duty of care, and that duty imposed on them a duty to exercise a reasonable care and skill in the provision of legal services to him. The three principal questions that arise are: (i) whether RHS were in breach of that duty; and, (ii) if they were, whether that breach was the cause of any loss of damage to him; and (iii) the quantification of any such loss. The relevant provisions of the CLA are the following:

5. [56]

   RHS also relied on Part 4 of the CLA, which is concerned with apportioning liability where “concurrent wrongdoers” bear responsibility for any loss or damage suffered by the plaintiff.

6. [57]

   As is apparent from even a superficial analysis of s 5B, and consistently with the five principles stated by Gummow J in Dederer, any claim in negligence (once a duty is established) starts with the proposition that there exists a risk of harm. To give rise to liability in negligence, that risk must be foreseeable, not insignificant, and such that a reasonable person in the position of the defendant would have taken precautions against the materialisation of the harm.

7. [58]

   Determination of whether a reasonable person would have taken precautions against a risk of harm (and, if so, what precautions) involves consideration of the four matters itemised in s 5B(2). Where a court concludes that the risk of harm was foreseeable, was not insignificant, and was such that precautions could and should have been taken, the defendant will ordinarily be found to have been in breach of his/her or its duty of care.

8. [59]

   Dederer and Shirt were decisions under the common law. Shirt predated the enactment of the CLA; the CLA did not apply to the RTA in Dederer (see [31]). But it may be seen that s 5B(2) reflects the considerations stated by Mason J in Shirt: Waverley Council v Ferreira [2005] NSWCA 418; (2005) Aust Torts Reports 81-818 at [45]; Council of the City of Liverpool v Turano [2008] NSWCA 270 at [171].

9. [60]

   Sections 5B and 5C are directed to questions of breach of duty. They do not address the identification of the relevant risk of harm: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48 at [13]. In Garzo v Liverpool/Campbelltown Christian School [2012] NSWCA 151 Meagher JA said:

10. [61]

    In Uniting Church in Australia Property Trust (NSW) v Miller [2015] NSWCA 320, at [119]-[122], Leeming JA discussed the degree of particularity or generality with which the risk of harm needs to be formulated. In any case, there is no single correct formulation: what is required will vary from case to case.

11. [62]

    While questions of breach are to be assessed “prospectively, not with the wisdom of hindsight”, in identifying the risk of harm, some degree of retrospectivity is permissible: Coles Supermarkets Australia Pty Ltd v Bridge [2018] NSWCA 183. In Bridge, Leeming and Payne JJA endorsed the reasoning of Campbell J in Vincent v Woolworths Ltd [2015] NSWSC 435; [2015] Aust Torts Rep 82-215 at [27]. Campbell J said:

12. [63]

    The standard of care required of persons providing professional advice and services was stated by the High Court in Rogers v Whitaker (1992) 175 CLR 479 at 483; [1992] HCA 58.

13. [64]

    That case involved an allegation of negligence against a medical practitioner in failing to warn a patient of a material risk in a proposed procedure. The High Court said:

14. [65]

    Although evidence of acceptable professional practice is admissible and often useful, the final adjudication of what is the appropriate standard of care is that of the court (Rogers, at 487): see also Rosenberg v Percival (2001) 205 CLR 434; [2001] HCA 18 at [7].

15. [66]

    Rogers and Rosenberg were cases involving the duties of medical practitioners. In Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 374 Malcolm AJA expressly adopted the principle so stated as relevant to the duty of legal practitioners (at [146]). McPherson AJA took a similar approach (at [362]). The third member of the bench, Ormiston AJA, expressed some reservation (at [650]).

16. [67]

    Both Rogers and Heydon predate the CLA. However, it appears generally to be accepted that the statement of principle in Rogers has continued application in defining the standard of care in proceedings under the CLA against professionals.

The plaintiff’s case

1. [68]

   In final written submissions, the plaintiff’s case was presented by way of two alternatives. The first, designated “the primary case”, was straightforward: it was that, by failing to commence proceedings in respect of Anne Liprini’s estate prior to the mediation of 6 December 2007, RHS failed to discharge their duty of care.

2. [69]

   What was designated “the alternative case” called into question the formulation of the orders that were agreed at the mediation. The breach of duty was (in final submissions) said to lie in the failure of Mr Sommerville to propose to Dr Liprini’s legal representative that the orders:

3. [70]

   The first of these was a 180⁰ degree turn from the case pleaded in the amended statement of claim. Notably, there was, in the amended statement of claim, no particularisation of the failure to designate assets as notional estate as a breach of duty. Rather the failure there specified was the failure to propose orders that bound Dr Liprini in his personal capacity. The breach now alleged is failure to seek to bind Dr Liprini in his executorial capacity.

4. [71]

   In support of the primary case, reliance was placed on five factual aspects of the evidence. These were:

Expert evidence

1. [72]

   The solicitors for each party qualified an expert to express an opinion to be tendered as opinion evidence under s 79 of the Evidence Act 1995 (NSW). The plaintiff’s solicitors retained Mr Richard Neal, a solicitor who holds specialist accreditation in wills and estates law for NSW and has practised in areas including applications under the FPA. The solicitors submitted a series of six questions to Mr Neal for his expert opinion. All questions were directed to whether RHS had been in breach of its duty to the plaintiff, in various respects.

2. [73]

   Mr Neal provided a report dated 7 March 2017. The first question asked of Mr Neal concerned the failure of RHS to commence proceedings in respect of Anne Liprini’s estate prior to the mediation. This is the question raised by the plaintiff’s primary case. The specific question asked of Mr Neal was:

3. [74]

   There was no clear answer to this question in Mr Neal’s report. He said that a grant of probate was not necessary for the commencement of proceedings, but immediately proceeded to question the effectiveness of the notation in clause 4 of the orders, by which the plaintiff agreed, if called upon to do so, to execute a Deed releasing Dr Liprini as executor from any claim under the FPA. This was not a question that had been submitted to him; nor was it a question raised on the pleadings.

4. [75]

   Mr Neal then discussed, as the “preferred course” seeking an order designating as notional estate property already distributed from James Liprini’s estate (from which provision could then have been made for the plaintiff) but also noted that that would entail the need to join as a party any person to whom the property had been distributed. This also was a question neither submitted to him nor raised on the pleadings.

5. [76]

   In respect of the observation concerning the need to join additional parties in the event of orders designating assets as notional estate, it may be noted that such of James Liprini’s estate as had been distributed had been distributed either directly to Dr Liprini, or to Anne Liprini, of whose estate Dr Liprini was the executor and sole beneficiary. Dr Liprini was, of course, already a party, in his capacity as executor of the estate of James Liprini. There were no other individuals whose rights would have been affected. There were therefore no other individuals whose joinder would have been necessary, although Dr Liprini’s participation would have involved him in both a personal, and an executorial, capacity.

6. [77]

   Mr Neal went on to say:

7. [78]

   The italicised portion of the answer may not be strictly correct. The effect of a notional estate order would indeed, by s 29 of the FPA, have been to extinguish the rights of whoever held the property the subject of the designation, but would merely have made that property available to satisfy an order for provision for the plaintiff, if he established that he was otherwise entitled. The plaintiff would not necessarily, and certainly would not automatically, have become entitled to the designated property. It would still be necessary that the discretion conferred by s 7 of the FPA be exercised in his favour. It is, however, correct that s 28(2) precluded an order designating as notional estate property in excess of that necessary to allow the making of appropriate provision. Designation of notional estate therefore assumes that a s 7 order will be made, and that the designated property will be available to satisfy the order.

8. [79]

   I can only read Mr Neal’s report in this respect as declining to offer an opinion that RHS failed to discharge their duty to the plaintiff by failing to commence proceedings prior to the mediation. Certainly it did not rise to the level of an opinion that RHS failed to reach the standard of reasonable care and skill expected of a solicitor advising a client in respect of a claim under the FPA. Nor does it provide the basis for a conclusion to that effect. That was a question Mr Neal did not address.

9. [80]

   Mr Neal’s report and subsequent oral evidence do, however, appear to be the foundation for the significant change in the plaintiff’s alternative case mentioned above.

10. [81]

    The remaining questions submitted to Mr Neal concerned the plaintiff’s alternative case, asserting inadequacies in the formulation of the orders. The answers were unhelpful to the plaintiff’s case. Mr Neal again discussed what he saw as the ineffectiveness of the release of his rights purportedly offered by the plaintiff in the notation in clause 4 of the orders. There is nothing in the answer to that question that identifies any failure of RHS in their duty to the plaintiff; if the purported release were indeed ineffective, it was to the detriment of Dr Liprini, and not to the plaintiff. The notation in clause 4 was, apparently, intended to protect Dr Liprini from any subsequent claim by the plaintiff against the estate of Anne Liprini.

11. [82]

    Mr Neal was also asked to express an opinion concerning the drafting of the orders in such a way that they failed to impose obligations on Dr Liprini in his personal capacity and/or in his capacity as executor of Anne Liprini’s estate. In view of the orders and declarations made by Nicholas J, this was a somewhat curious question to ask Mr Neal. Nicholas J declared that the 6 December 2007 orders both bound the two estates, and also bound Dr Liprini personally. Mr Neal’s answer was:

12. [83]

    There is in this no expression of opinion that RHS failed to achieve the standard of care required of the reasonable practitioner exercising reasonable care and skill. Nor does it provide any basis for a conclusion to that effect.

13. [84]

    The same may be said about Mr Neal’s answers to the remaining questions, concerning failure to include a time for payment, and provision for security. With respect to the plaintiff’s case that the agreed orders ought to have specified a time for payment, he said:

14. [85]

    With respect to the plaintiff’s claim that RHS ought to have attempted to include a term for security over assets in Anne Liprini’s estate, Mr Neal said:

15. [86]

    Absent from Mr Neal’s expressed opinion was any specification of the nature of security that could realistically and, as a matter of practicality, have been achieved in the time available.

16. [87]

    On behalf of RHS, Ms Pamela Suttor was retained to provide an opinion. The questions she was asked to address varied significantly from those directed to Mr Neal. The first was:

17. [88]

    Ms Suttor’s answer was, essentially, in the negative. She added:

18. [89]

    The second question asked of Ms Suttor concerned the failure of RHS to ensure that the orders provided for security for the payment of the agreed sum. She was specifically asked whether it was “usual practice” to include such a provision. Again, her answer, put shortly, appears to have been in the negative – she then discussed difficulties that such a provision might cause in the “orderly administration” of an estate. The difficulties she mentioned do not arise in either of the Liprini estates.

19. [90]

    Ms Suttor was asked some questions of dubious relevance concerning the quantification of any provision that the plaintiff might have received had he litigated (this might have been intended to go to the question of any damages to be awarded should the plaintiff be successful in his present claim, although the plaintiff’s pleaded case on damages was expressed as the lost opportunity to recover the whole of the amount agreed). She considered that provision of $750,000 was “at the upper end of the range” that the plaintiff might have achieved. She was also asked questions about the statutory requirement for judicial approval of any release.

20. [91]

    Ms Suttor was not asked to comment on what was contended on behalf of the plaintiff to have been the negligent formulation of the short minutes of orders.

21. [92]

    Ms Suttor was then asked to comment on Mr Neal’s report. With respect to the plaintiff’s primary case she agreed that the orders as formulated “do not properly designate notional estate”. She considered, however, that that was overcome by the findings of Nicholas J. She said that in her experience it was reasonable for a competent solicitor when still within time to delay filing a summons pending the outcome of the mediation.

22. [93]

    She agreed with Mr Neal that the notation in clause 4 was ineffective as a release of the plaintiff’s rights. She agreed that the orders “could have been expressed differently” so as more clearly to impose obligations on Dr Liprini either personally or in his capacity as executor of Anne Liprini’s estate; however, she observed, correctly, that Nicholas J had found that they were effective to bind both estates. She agreed with Mr Neal’s answer concerning the specification of a time for payment and provision for interest.

23. [94]

    Mr Neal and Ms Suttor gave concurrent oral evidence. In the cross-examination of the expert witnesses a number of topics were canvassed. Counsel adopted a procedure of cross-examination of each witness on each topic before moving to the next. They began with the plaintiff’s primary case.

24. [95]

    Mr Neal maintained that proceedings in relation to Anne Liprini’s estate ought to have been commenced prior to the mediation. His rationale for this view appears to have been that to have done so would have “maximise[d] the client’s position by having both estates available.” The importance of that was that an order for provision under s 7 of the FPA operates as a codicil to the will (see s 14(1)(a)); it changes property rights and thus creates property rights in favour of a family provision plaintiff.

25. [96]

    Ms Suttor was of a different view. She considered that, in the circumstances, RHS acted “appropriately”: that was because the time for commencing proceedings had not expired. Eventually, however, she accepted that, as competent practitioner, she would have issued proceedings at a much earlier time than was done, and that she would have expected any competent practitioner do so, although she declined to specify a time by which proceedings should have been commenced.

26. [97]

    Mr Neal was also influenced by the fact that James Liprini’s estate had, but for $30,000, been administered. That left insufficient in the actual estate to satisfy an order under s 7. Accordingly, he said, issuing proceedings in respect to Anne Liprini’s estate was “a no brainer”. He considered that proceedings ought to have been commenced in order “to put people in an effective position to be able to meaningfully negotiate”. (This ignores the fact that the parties did “meaningfully negotiate”).

27. [98]

    The cross-examiners then turned to the alternative case. Counsel for the plaintiff focused on the evidence of Dr Liprini’s past history, including an alleged history of poor financial management, his stated need for funding and the plaintiff’s asserted warning to RHS that he would not agree to pay. On the assumption of those facts, it was suggested to Ms Suttor that an ordinarily skilled solicitor would have proposed some form of security in the orders. Ms Suttor replied by referring to the statutory obligations of executors, and the required oath of an executor in the administration of estate properties.

28. [99]

    Mr Neal took the opposite view, that “security” should have been the subject of discussion and included in the negotiations. He did not explain the nature of the security he had in mind, nor the practicalities involved in implementation of an order for security.

29. [100]

    Cross-examination then veered off in a different direction, into discussion about the enforceability of the orders made. Mr Neal said:

30. [101]

    Both experts agreed that an order under s 7 of the FPA operates as a codicil to the will (see s 14(1)(a)), and that the remedy for any default on the part of the executor was an administration suit under the then Wills Probate and Administration Act 1898 (NSW). Two observations may be made about that. The first is that, as the orders of Nicholas J demonstrate, there was a family provision order made in respect of Anne Liprini’s estate. The second is that it is not the plaintiff’s case that RHS failed to take proceedings under the Wills Probate and Administration Act.

31. [102]

    Mr Neal expressed a preference, as “quicker, cheaper and easier to get the answer”, proceeding under s 29 of the Civil Procedure Act 2005 (NSW). Section 29 provides:

32. [103]

    Mr Neal’s approach, as I understand his oral evidence, entailed the following propositions (I make no comment on the correctness or otherwise of the propositions):

33. [104]

    Mr Neal appears to have taken the view, expressed in proposition (v), that because no proceedings in respect of Anne Liprini’s estate had been commenced, there could not have been a family provision order in relation to her estate. The orders were, in Mr Neal’s view, worthless as family provision orders in James Liprini’s estate because there remained only $30,000 undistributed, and no property that had been distributed was designated as notional estate. That view is difficult to reconcile with the orders of Nicholas J.

Discussion

1. [105]

   As indicated above, there was no issue that RHS owed the plaintiff a duty of care. That duty may properly be characterised as a duty to take reasonable precautions against a risk of harm that had the qualities required by s 5B(1) of the CLA.

2. [106]

   What that duty involved cannot be determined in the absence of the identification of the risk of harm against which the plaintiff asserts the precautions ought to have been taken. The precautions which the plaintiff alleges should have been taken are clear enough; in relation to the primary case, RHS should have taken the precaution of commencing proceedings in relation to Anne Liprini’s estate prior to the mediation of 6 December 2007. In relation to the alternative case, the precautions were the more specific and meticulous formulation of the orders that were in fact made, advising the plaintiff not to agree to terms that omitted personal liability of Dr Liprini, (or, as later framed, omitted designation of property as notional estate) provision for security and for interest, or warning the plaintiff of the consequences (risks) of agreeing to orders in which those provisions were not incorporated.

3. [107]

   Scant attention was paid by the parties to the requirements of Part 1A of the CLA, although counsel for RHS did address submissions to the issue of foreseeability.

4. [108]

   The general principles stated in s 5B are founded on an assumption that there exists a foreseeable and not insignificant risk of harm to the plaintiff against which a potential defendant can and should take precautions. It is clear that the exercise required by s 5B(1)(a)-(c), and (2) cannot proceed unless and until the risk of harm has been identified. So much was stated, extraneously to the CLA, by Gummow J in Dederer, and has been repeated in many decisions under that legislation. The identification of the risk of harm is fundamental to the application of the s5B principles.

5. [109]

   To focus initially on the precautions that should have been taken, without first identifying the risk of harm against which those precautions should have been taken, is to pass over a fundamental question: what was the risk of harm? Attention must be directed to that question at the outset. In this case, it was not. Neither party attempted to identify a risk of harm that could arise from the failure to commence proceedings prior to the mediation. When attention is focused on that question, it becomes difficult to see what possible risk of harm existed that could have been avoided by the commencement of proceedings prior to the mediation. Accepting, as I must, having regard to the decision in Bridge, that some retrospectivity is permitted in the identification of the risk of harm, I am nevertheless of the view that that risk must be shown to have existed at the time that it is said that the precautions should have been taken. That must be, at the latest, 5 (or possibly 6) December 2007. But what risk of harm then existed? Anne Liprini died on 26 November 2006. The plaintiff had until 26 May 2008 to commence proceedings. I see no risk of harm in proceeding to mediation in respect of James Liprini’s estate without proceedings in relation to Anne Liprini’s estate having been commenced. Nor can I see any risk of harm in including Anne Liprini’s estate in the mediation, notwithstanding that proceedings had not been commenced.

6. [110]

   The failure to identify, or the incorrect identification of, the risk of harm has given rise to difficulties in a number of cases, including Dederer, where the incorrect identification led to two “consequent errors”. The majority of cases, including Dederer, in which the question has arisen have been claims for damages for personal injury. In those cases, the harm to be considered is easily identifiable as the personal injury on which the plaintiff sues. It was, perhaps, this that led Campbell J in Vincent, supported by Leeming and Payne JJA in Bridge, to endorse the use of hindsight to identify the risk of harm. That also appears to have been the approach taken by Basten JA and Meagher JA in Garzo. At [7] Basten JA said:

7. [111]

   The passage from the judgment of Meagher JA, extracted above, states that:

8. [112]

   It is harm, not risk, that materialises or eventuates. Identifying the harm does not necessarily identify the risk. In Miller, Leeming JA saw a distinction between risk and harm. “Risk of harm” is a composite concept. But “risk” and “harm” are not co-extensive. In many cases, particularly of personal injury, the harm will be readily identifiable. It is the risk that is the focus of the s 5B inquiry. In Dederer, the harm was not in doubt: it was serious spinal injury (suffered after diving off a bridge into shallow waters). But that did not identify the risk, which was to be found, as I read [60] of Gummow J’s judgment, by identifying the “true source of potential injury”. That was not the act of diving off the bridge, but the impact of jumping into potentially shallow water and shifting sands of the estuary into which Mr Dederer jumped or dived.

9. [113]

   In McKenna v Hunter & New England Local Health District [2013] NSWCA 476; (2013) Aust Torts Reports 82-158 Garling J (in dissent) took Gummow J’s phrase to mean “the general causal mechanism of the injury sustained by the plaintiff”, an approach adopted by the Court of Appeal in Perisher Blue Pty Ltd v Nair-Smith (2015) 90 NSWLR 1; [2015] NSWCA 90. In Perisher Blue the court (Barrett and Gleeson JJA and Tobias AJA) considered that:

10. [114]

    Identification of the risk of harm therefore involves attention to the cause of the harm upon which the plaintiff sues. How narrowly or broadly a risk of harm should be defined will vary from case to case: Perisher Blue at [106].

11. [115]

    In the present case, neither the specific harm nor the risk of its occurrence is readily discernible. In general terms, the harm on which the plaintiff sues is economic loss: RHS’ submissions assumed that the harm was the inability of the plaintiff to recover the whole of the $770,000 for which provision was made in the 6 December orders. That is not inconsistent with the pleadings in the amended statement of claim. Counsel for the plaintiff did not take issue with the formulation proposed.

12. [116]

    However the “harm” is formulated, the primary claim fails. No “true source of [that] potential injury [or harm]” or “general causal mechanism” can be associated with the failure of RHS to commence proceedings in respect of Anne Liprini’s estate; there is no “person, thing or set of circumstances” in that failure that gave rise to the harm on which the plaintiff sues – whether that harm be defined in general terms as economic loss, or more specifically as the inability to recover the whole of the agreed sum. The nature of a mediation must be understood. It is a process in which parties to litigation are encouraged to resolve their differences, with the assistance of a trained mediator, and with the advice of independent lawyers. There is no compulsion on any party to agree to any proposed settlement. Even in a court-ordered mediation a party may decline even to negotiate. A mediation can have no binding effect other than by the agreement of the parties.

13. [117]

    In this case the plaintiff was clearly aware of his rights to refuse, or to cease, to participate, which is what he ultimately did. The mediation could have proceeded on the plaintiff’s claim in relation to James Liprini’s estate, although, given the limited value of undistributed assets, there would have been little point in taking that course. That difficulty was not insuperable: it was able to be overcome by any one of three alternative courses: by including Anne Liprini’s estate in the negotiations; or, as Mr Neal proposed, by designating distributed assets from James Liprini’s estate as notional estate; or by abandoning the mediation and proceeding to a hearing of the claim, in which case proceedings in respect of Anne Liprini’s estate would have been formally commenced. The parties chose the first option. There was no risk of harm associated with that course; if the parties were unable to reach agreement, they could (and would) have proceeded to the third alternative, pursuing the litigation involving both estates. Absolutely nothing was put at risk by the adoption of the course taken. Had Dr Liprini not agreed to negotiate with respect to both estates the mediation would simply have come to an end.

14. [118]

    The events that in fact occurred demonstrate that. Notwithstanding that no proceedings had been commenced with respect to Anne Liprini’s estate, a binding settlement (that it was binding was confirmed by the judgment of Nicholas J) was reached. The plaintiff achieved precisely the result he would have achieved had proceedings in relation to Anne Liprini’s estate been formally commenced. The eventual failure of Dr Liprini to honour the obligations he had undertaken was unrelated to the circumstances in which the mediation proceeded.

15. [119]

    What difference, it might be asked, would the formal commencement of proceedings in relation to Anne Liprini’s estate have made to the harm suffered by the plaintiff?

16. [120]

    I appreciate that Mr Neal would contend that a mediation of the two claims would have resulted in “family provision orders” that operated as a codicil to one of the wills (or both). But (contrary to the assumption underlying Mr Neal’s opinion) that is the effect of the orders that were in fact made, as is plain from the subsequent orders of Nicholas J. I have not overlooked that a question of construction of the declaration in order 1 might arise: in its terms, it binds both estates as well as Dr Liprini personally. I favour the view that it should be construed as declaring that the orders of 6 December 2007 were, in the first instance, orders under s 7 of the FPA. That is because they were made following a mediation in FPA proceedings, to which Dr Liprini was a party by reason of his status as executor of (at least) the estate of James Liprini. Once Anne Liprini’s estate was included, the orders bound him as executor of that estate also. The declaration that he was personally liable was, perhaps, surplusage, reflecting, among other things, that he was the ultimate beneficiary of both estates.

17. [121]

    In my opinion, therefore, the orders were “family provision orders”, with all the consequences such orders carry.

18. [122]

    Mr Neal also contended that proceedings in relation to both estates would have given the plaintiff greater negotiating power. It is difficult to see how that can be so. It was always open to the parties to include both estates in the negotiations, as in fact happened. No additional negotiating power would have accrued to the plaintiff by the formal commencement of proceedings.

19. [123]

    Nor (although this does not strictly arise on the pleadings) was there any source of potential harm to the plaintiff in reaching a settlement of the proceedings in the absence of formalised proceedings in respect of Anne Liprini’s estate. That, too, is established by the judgment of Nicholas J.

20. [124]

    It might be said – taking permissible retrospectivity to its outer limits – that the risk of harm was what in fact eventuated – that Dr Liprini would fail to honour the obligation to which he agreed. But that was not a risk of harm from proceeding with the mediation in the absence of commenced proceedings. It was a risk to which every settlement is subject, and was not avoidable by the commencement of proceedings. It would have existed whether or not proceedings in respect of Anne Liprini’s estate had been commenced.

21. [125]

    Whichever way the plaintiff’s case is framed there was simply no risk of harm to him from RHS’ failure to commence proceedings before the mediation. The plaintiff’s primary case fails at the first barrier, the identification of the risk of harm.

22. [126]

    Although the above conclusion is determinative, it is appropriate to address the question of breach of duty, as it is posed by s 5B.

23. [127]

    The plaintiff placed some weight on his undoubted instructions to RHS to commence proceedings, and relied on the uncontentious proposition, adduced in cross-examination of Mr Sommerville and Ms Suttor, that a solicitor is obliged to comply with instructions unless there is a compelling reason (such as illegality or impracticability) for not doing so. Ms Suttor’s answer was:

24. [128]

    There is no evidence that the plaintiff gave any express or implied instructions as to when to commence the proceedings. It was entirely reasonable for RHS not to do so prior to a grant of probate provided they did not allow the limitation period to elapse. In the absence of a grant of probate, Dr Liprini was not at liberty to administer the estate. The plaintiff’s case in contract was never framed as a failure to comply with instructions. It will be remembered, also, that Mr Sommerville was waiting for instructions from the plaintiff concerning his financial position.

25. [129]

    In written submissions on behalf of the plaintiff, reliance was placed upon what were said to be admissions of breach of duty made by Mr Sommerville in cross-examination. On examination, these admissions, if they can be so categorised, carry little weight. For example, reliance was placed upon the following cross-examination of Mr Sommerville:

26. [130]

    Reference was not made to the question which immediately followed, which was:

27. [131]

    Further questions and answers relied upon were:

28. [132]

    Reliance was also placed on answers given by Mr Sommerville in cross-examination in which he accepted that he may have overlooked following up his enquiries of Dr Liprini’s solicitors concerning the grant of probate.

29. [133]

    I do not see any of this evidence as amounting to an admission of breach of duty of care; nor, if it did, would I consider myself bound by Mr Sommerville’s opinion. As is made plain in Rogers and Rosenberg, that is a question for the court.

30. [134]

    Reliance was also placed upon evidence given by both Mr Neal and Ms Suttor in cross-examination. As indicated above, those witnesses gave concurrent evidence. The following transcript is relevant:

31. [135]

    None of this evidence established that the failure to commence proceedings before the mediation in relation to James Liprini’s estate constituted a failure by RHS to exercise care and skill to the standard expected of a reasonably skilled and competent legal practitioner.

32. [136]

    Even if I am wrong in concluding that there was no identifiable risk of harm, the plaintiff has failed to establish any breach of duty by the failure to take the precaution of commencing proceedings in relation to Anne Liprini’s estate.

33. [137]

    These conclusions also are reinforced by the judgment of Nicholas J. That decision established that Anne Liprini’s estate was incorporated in the settlement agreement, and Dr Liprini, as executor of that estate, was bound by the agreed orders. Commencement of proceedings in respect of Anne Liprini’s estate was not necessary to achieve that result.

34. [138]

    It may be that the enforcement proceedings taken by RHS on behalf of the plaintiff ought to have been in the nature of an administration suit (to compel Dr Liprini, as executor, properly to administer the estates in accordance with the orders of 6 December 2007) and it may be that, rather than relying on a proof of debt in Dr Liprini’s bankruptcy, the plaintiff ought to have sought to have his trustee in bankruptcy make the payment in accordance with Nicholas J’s orders but, even if that be so (and it has not been argued) that is not the negligence that the plaintiff asserts.

35. [139]

    Causation is, under the CLA, a separate issue, notwithstanding that identification of the risk of harm has, as I have indicated, itself involved causation questions.

36. [140]

    Section 5D(1)(a) of the Act requires that the negligence asserted be a necessary condition of the occurrence of the harm the plaintiff alleges to have suffered. Although I have found that there was no negligence, even if there were, the failure to commence proceedings was not a necessary condition of the economic loss the plaintiff claims to have suffered – that is, (on my calculation) $311,236, being the difference between the settlement sum of $770,000, and the amount the plaintiff eventually received ($458,764). That is for the same reasons that there was no risk of harm in proceeding as in fact happened. The plaintiff’s claim is based on the unsustainable proposition that, but for the failure of RHS to commence proceedings in relation to Anne Liprini’s estate prior to the mediation, he would have recovered the whole of the agreed settlement sum. The proposition is unsustainable because commencement of proceedings would not have prevented Dr Liprini from defaulting on his obligations. The inability of the plaintiff to recover the whole of the $770,000 settlement sum was caused, not by the absence of commenced proceedings, but by Dr Liprini’s default. It is likely, indeed virtually certain, that that default would have occurred, regardless of the state of the formal proceedings.

37. [141]

    The plaintiff’s alternative case is that the negligent formulation of the orders, in specific respects, failed adequately to protect him against the economic loss that he sustained by reason of Dr Liprini’s failure to honour the obligations he had undertaken. As is made clear above, it was recognised on behalf of the plaintiff that Dr Liprini’s agreement to any proposed terms was beyond the control of RHS. The best they could do was propose terms to be included in the short minutes of orders. The plaintiff’s alternative case, therefore, was three tiered: (i) that RHS ought to have proposed certain terms to Dr Liprini’s legal representatives; (ii) that if Dr Liprini rejected those terms, RHS ought to have advised the plaintiff to proceed to a hearing of his claims (on both estates); and (iii) that RHS ought to have warned him of the risks of entering into an agreement that did not contain those terms.

38. [142]

    Considering “risk of harm” at a level of generality, I do not doubt that there exists a risk of harm in the formulation of orders intended to reflect the settlement of litigation. Risks are that the orders may fail to convey the true intentions of the parties, may fail to incorporate necessary or assumed terms, or may inadvertently include terms not the subject of specific agreements. The orders may fail to include terms necessary to protect the client’s interests. There may be other risks. Any of these could result in harm to the plaintiff in the sense of economic loss by reason of the deficiencies in the formulation of the terms. At that level of generality, I accept that the formulation of orders resulting from settlement at mediation carries with it a risk of harm – as does the formulation of orders reflecting any agreement. A competent practitioner would then take precautions to ensure that harm did not materialise or eventuate as a result. The harm here relied upon is the harm that did occur: economic loss of $311,236. The immediate cause of that loss was the failure of Dr Liprini to comply with the orders. Was there, as at 6 December 2007, a risk of that loss or loss of that kind, associated with the formulation of the orders or the subsequent advice, against which precautions should have been taken? For there to be a relevant risk of harm, the plaintiff must relate that harm to one or more of the defects in the 6 December 2007 orders that he asserts, or deficiencies that he asserts in the advice that RHS did (or did not) give him in relation to those orders.

39. [143]

    The questions which then arise are those specified in s 5B(1) of the CLA – whether the risk was foreseeable, not insignificant, and what precautions, if any, a reasonable person in the position of RHS would have taken to avoid the materialisation of the harm. These can be disposed of briefly.

40. [144]

    The first issue is foreseeability. Was it foreseeable that Dr Liprini would, notwithstanding his agreement to the terms, fail to honour the obligations he had undertaken? There is always a risk, however slight, that a party to an agreement might fail to honour that agreement. I accept that there was foreseeable risk that Dr Liprini would default on his obligations. That is reinforced by the history of instability of which the plaintiff spoke. It is a more dubious proposition that “the true source of that risk” was the manner in which the orders were formulated.

41. [145]

    The next question is the significance of the risk. Reliance was placed on the plaintiff’s evidence of the conversation he had with Mr Sommerville in which he warned Mr Sommerville of Dr Liprini’s unreliability. But, even taking the plaintiff’s evidence at its highest, those warnings were that Dr Liprini would not agree to pay; they were not warnings that he might agree to pay and fail to do so. That is why it is unnecessary to resolve the disputed facts concerning the precise terms of the conversations the plaintiff had with Mr Sommerville. Once Dr Liprini had agreed to pay, contrary to the plaintiff’s expectations, Mr Sommerville had no reason to believe that he would fail to do so. Dr Liprini, as executor of both estates, had statutory and legal obligations in their administration, and was required by statute to swear or affirm that he would properly discharge his duties as executor. There were adequate funds in the estate of Anne Liprini out of which to meet the agreed payment. In these circumstances, to the extent that there was a foreseeable risk that Dr Liprini would fail to pay, while the risk was not insignificant, its significance was limited.

42. [146]

    The final question concerns the precautions that the plaintiff asserts ought to have been taken. Here, the considerations listed in s 5B(2) come into play. In respect of the precautions, there was a major reversal in the plaintiff’s case. The required precautions, as pleaded in the amended statement of claim, were:

43. [147]

    Between the filing of the amended statement of claim and final submissions the first of the terms ((i)(a)) (presumably on the evidence of Mr Neal) was transformed into:

44. [148]

    Just why it was initially pleaded that the orders ought to have been framed so as to bind Dr Liprini in his personal, as distinct from his executorial, capacity is not clear. As I have noted above, the orders were plainly made in FPA proceedings to which Dr Liprini was a party in his executorial capacity. There were ample funds in Anne Liprini’s estate to meet the settlement sum. Dr Liprini had statutory obligations as executor. Those circumstances point to a need to formulate orders that bound one or other or both of the estates.

45. [149]

    In any event, that part of the pleading appears to have been abandoned. It is contradicted by the position finally taken on behalf of the plaintiff. If the proposition were pursued, I would reject it. The plaintiff’s interests were better protected by orders that made Dr Liprini liable as executor of both estates, which, combined, were sufficiently solvent to meet the agreed settlement sum.

46. [150]

    As to the second asserted required term (provision for security) no attention was directed to the practicalities of providing for security: the measures mentioned in submissions were a mortgage over real estate or irrevocable authorities to banks in which money in Anne Liprini’s name was held. I am unable to conclude that these were reasonably practicable precautions which ought to have been, but were not, taken.

47. [151]

    A mortgage was, at the mediation, obviously impractical, even if Dr Liprini had been prepared to agree to it. To arrange a mortgage would have taken time and, presumably, expense. An irrevocable authority to banks could, possibly, have been arranged, but was also impractical in the atmosphere of the mediation. Ms Suttor did not support a provision for security as a precaution that ought to have been taken by RHS; nor did Mr Neal.

48. [152]

    A proposal to Dr Liprini’s legal representatives for provision for security was not a precaution that a reasonable person in the position of RHS would have taken. Even if that is incorrect, and RHS ought to have proposed a security term, there can be no confidence that Dr Liprini would have agreed to it, and the likelihood is that he would not. The real question then is what RHS ought to have done if he refused. The plaintiff’s position is that RHS ought then to have advised him to abandon the mediation and proceed to litigation. For reasons that appear below, I do not accept that that is a precaution that a reasonable person (legal practitioner) in RHS’s position would or ought to have taken.

49. [153]

    The last term it is said ought to have been proposed is stipulation of a time for payment, (probably 28 days, given that funds were readily accessible), in default of which interest would run. I accept that that is a standard provision in terms of settlement that require the payment of money.

50. [154]

    Mr Neal in his report stated:

51. [155]

    I have already accepted that the risk of non-payment was not insignificant. I further accept that a reasonable person in RHS’s position would have sought, through Dr Liprini’s legal representatives, the inclusion of a specified time for payment, and for interest in the event of non-payment within that time. It is a matter of speculation what would have been the result of such a proposal. It is by no means clear that Dr Liprini would have agreed to such a term, and the probabilities, to the extent that they can be assessed, point in the opposite direction. It cannot be assumed that Dr Liprini, who was said to be on the verge of a nervous breakdown, would have agreed to a term such as that now proposed.

52. [156]

    The plaintiff’s fall-back position is that, failing acceptance by Dr Liprini of all three terms, RHS ought to have advised him to abandon the mediation and proceed to litigation. No argument was addressed to what RHS ought to have done in the event that the only term that ought to have been, but was not, proposed was rejected. That is, no argument was addressed to what precautions ought to have been taken in the event that Dr Liprini declined to agree to a time for payment and interest provision.

53. [157]

    The general proposition, that failure by Dr Liprini to agree to the proposed terms ought to have prompted RHS to advise the plaintiff to abandon the mediation and litigate, must be considered in this single respect.

54. [158]

    I do not accept that, if RHS had proposed an interest term that Dr Liprini refused, RHS ought to have advised the plaintiff to litigate. Litigation carries serious risks. Mr Lawson had given pessimistic advice about the plaintiff’s prospects of succeeding in his claim, and quantified the provision he might expect at between $100,000 and $150,000 – a fraction of the settlement figure of $770,000. Ms Suttor spoke of the variability of awards following litigation, of a then current reluctance to make provision in favour of adult sons, and considered that $770,000 was “at the upper end of the range” which Dr Liprini might have expected to be awarded by adjudication.

55. [159]

    To have advised the plaintiff, on the failure of Dr Liprini to agree to a time for payment and provision for interest in default of prompt payment to litigate would have been to advise him to gamble a promised $770,000 against what would have been a modest sum representing interest. So advising the plaintiff was not a precaution a reasonable person in the position of RHS would have taken. Indeed, it might have been seen as foolhardy. The same applies in relation to a security provision if it be considered that this was something RHS ought to have sought from Dr Liprini.

56. [160]

    In any event, what the plaintiff might have done in response to such advice is a matter of sheer speculation.

57. [161]

    There remains the late addition of the alternative term, proposed by Mr Neal, of seeking an order designating as notional estate distributed assets out of James Liprini’s estate. Designation of a sum of $770,000 in one or more of the accounts held in Anne Liprini’s name as notional estate of James Liprini would, subject to Dr Liprini’s agreement, have been a relatively simple matter. But once Anne Liprini’s estate was included in the mediation, and the quantum of provision agreed, it was unnecessary. There were ample funds in her estate to meet the order without resort to the notional estate procedure. And, apart from the uncertainty that Dr Liprini would have agreed to such a term, there are other difficulties. Mr Neal appears to have assumed that the orders that were made were not what he classified as “family provision orders”, which would have operated as a codicil to the will (or wills), giving the plaintiff rights that would have taken priority over Dr Liprini’s trustee in bankruptcy.

58. [162]

    As I have earlier made clear, I do not accept that the orders were not family provision orders carrying the consequences stated by Mr Neal. The orders of Nicholas J suggest otherwise. In addition to the reasons I have given above, two of the orders are, in this respect, significant. By order 3 interest was to be calculated on the basis prescribed by s 84A of the Wills Probate and Administration Act 1898 (NSW), implying that the orders were orders made in the administration of an estate. By order 2, pursuant to UCPR 54.3, Dr Liprini was required to pay the agreed sum to the plaintiff. UCPR 54.3 is a rule specifically concerned with the administration of estates.

59. [163]

    It is not possible to reach a concluded view on whether the orders made on 6 December, and clarified by Nicholas J, were “family provision orders”. I am not satisfied, however, that designating assets as notional estate was a precaution that ought to have been (or could have been) taken by RHS; nor am I satisfied that, in the absence of agreement by Dr Liprini to such an order, RHS ought to have advised the plaintiff to abandon the mediation and litigate, and that it was negligent not to do so.

60. [164]

    That raises the final step of the plaintiff’s case in this respect, that he ought to have been warned of the potential consequences of agreeing to terms that did not include a term specifying the time for payment, and the provision for interest in the event of non-compliance. It is a matter for further speculation what the plaintiff would have done in response to such advice.

61. [165]

    It cannot be overlooked that, by the time the terms were being drafted, and any such discussion might have been undertaken, the plaintiff had left the mediation. Although he was contactable, it may have been difficult for Mr Sommerville to give him the advice it is now claimed he ought to have given, and for the plaintiff to have made a decision whether to accept the settlement or proceed to litigation. In these circumstances, I am unable to reach a conclusion that RHS (or Mr Sommerville) were in breach of their duty to the plaintiff by failing to take the final step for which he now contends.

62. [166]

    Any such advice would necessarily have included reference to the hazards of litigation, involving those uncertainties and imponderables mentioned by Ms Suttor, the assessment of the plaintiff’s prospects of success given by Mr Lawson and Mr Lawson’s quantification of the provision the plaintiff might have been awarded after litigation. The risk that Dr Liprini might agree to a settlement but default on his agreement was a minor risk against those considerations.

63. [167]

    The plaintiff’s alternative case fails. The plaintiff has not established breach of RHS’s duty to him in the formulation of the terms of the agreement and the short minutes of order, nor in the advice given to him with respect to those orders.

64. [168]

    Given the manner in which the plaintiff’s alternative case was put, the question of causation has some complexity and needs to be addressed in relation to each term of the orders which it is said ought to have been proposed, as well as the alternative precautions postulated in the event that Dr Liprini declined to agree to those terms. Since I have concluded that the plaintiff has failed to establish any breach of duty, I will confine my conclusions on causation to a minimum.

65. [169]

    I am not satisfied that, but for the omission of any or all of the postulated terms, the plaintiff would have recovered the whole of the agreed settlement amount. I am not satisfied that, but for RHS’s failure to advise him to proceed to litigate in the absence of agreement by Dr Liprini to any or all of those terms, he would have recovered the whole of that amount.

66. [170]

    For the third tier of the plaintiff’s alternative case to succeed, he would need to establish that, if RHS’s advice of the “risks” (which risks were unidentified) of accepting settlement terms as he did, he would more probably than not have proceeded to litigate, more probably than not have been awarded at least $770,000 and would, more probably than not, have recovered that sum. None of these is established to my satisfaction. In each case, the probabilities point in the opposite direction. The likelihood is that the plaintiff would, in the face of an offer of $770,000, have rejected advice to proceed to litigation and accepted the offer. The evidence showed that he was in a dire financial position and, if not desperate, extremely keen to secure a settlement. What he would have done in consequence of advice to proceed to litigation is a matter of speculation of which the plaintiff would not have been permitted to give self-serving evidence: s 5D(3)(b).

67. [171]

    Most importantly, even if I were satisfied that the plaintiff would have accepted advice to litigate rather than accept the settlement offered, and had succeeded to the necessary extent in that litigation, far from being satisfied that he would have recovered the sum awarded, I am satisfied that Dr Liprini would have conducted himself exactly as he in fact did, and failed to pay the sum awarded – with consequences that in fact eventuated.

68. [172]

    The plaintiff has failed to establish any causal connection between the economic loss he claims and any default on the part of RHS.

69. [173]

    The remaining matters may be dealt with briefly.

Civil Liability Act s 5 O

1. [174]

   As noted above, RHS invoked s 5 O of the CLA. The terms of s 5 O have been set out above. It is established that s 5 O operates as a defence to defeat a claim in negligence: see Dobler v Halvorsen (2007) 70 NSWLR 151; [2007] NSWCA 335; Paul v Cooke (2013) 85 NSWLR 167; [2013] NSWCA 311 (although Basten JA doubted this proposition in Sparks v Hobson; Gray v Hobson [2018] NSWCA 29 at [17] ff).

2. [175]

   Even accepting that s 5 O operates as a defence, its construction is not without controversy. In McKenna (supra) Macfarlan JA, with the concurrence of Beazley P, held that the provision is directed to:

3. [176]

   The decision in McKenna was reversed on appeal to the High Court on other grounds and the construction of s 5 O did not arise: Hunter & New England Local Health District v McKenna (2004) 253 CLR 270; [2014] HCA 44. It did arise for consideration in Sparks, but without final resolution. Macfarlan JA adhered to the views he had expressed in McKenna: [209]-[215]. Basten JA took a different view: see [30]-[40]. With reservations about the McKenna construction, I considered myself constrained by principle to follow that construction: see [332] ff. I maintain that view, particularly as I am sitting as a judge at first instance.

4. [177]

   That means that the issue raised by s 5 O can be readily disposed of. RHS did not adduce any evidence of “a practice” to which they had conformed. If I otherwise found that RHS was in breach of its duty of care to the plaintiff, in either of the respects alleged, s 5 O would not, as currently interpreted, avail RHS.

5. [178]

   It would not be otherwise had the views expressed by Basten JA and myself in Sparks prevailed; neither Ms Suttor nor Mr Neal gave evidence that the manner in which RHS acted was widely accepted in Australia by peer professional opinion as competent professional practice. That is not to say that they did not; there simply was no evidence of any acceptance of the conduct as widely accepted in Australia by peer professional opinion as competent professional practice.

6. [179]

   If I were otherwise satisfied that the plaintiff had proved negligence, I would not uphold a defence under s 5 O of the CLA.

Advocates’ immunity

1. [180]

   RHS pleaded the defence available to legal practitioners by reason of what is known as the doctrine of advocates’ immunity. Given the views to which I have come in relation to the plaintiff’s claim, this defence may also be disposed of briefly. It necessarily involves the hypothesis that there was, or might have been, some negligence on the part of RHS.

2. [181]

   The plaintiff disputed that the doctrine applies. In relation to the primary case he relied on Saif Ali v Sydney Mitchell & Co (a Firm) [1980] AC 198 and MacRae v Stephens [1996] Aust Torts Reports 81-405. Each of these was a case in which a limitation period had been allowed to expire. That is not this case, but that does not mean that some instruction may not be available from those decisions.

3. [182]

   The most recent exposition of the doctrine of advocates’ immunity is to be found in the joint judgment of French CJ, Keifel, Bell, Gageler and Keane JJ in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16. The foundation of the doctrine lies in the need to protect the finality and certainty of judicial determinations from collateral attack. In order for the work of an advocate to attract the immunity it must have an “intimate connection” with the conduct of the case in court such as to affect its outcome by judicial decision. What is protected is work by the advocate that bears upon the judicial determination of the case: see [46].

4. [183]

   The majority in the High Court held that the immunity does not extend to acts or advice of the advocate which do not move the litigation towards a determination by a court. Specifically, the immunity does not extend to advice that leads to a settlement agreed between the parties: see [38]-[39].

5. [184]

   Attwells concerned the settlement of commercial litigation on the day fixed for hearing. The plaintiffs then alleged that they had been given negligent advice by their solicitors with respect to the terms of settlement. The solicitors invoked the doctrine of advocates’ immunity as it was then understood. The majority in the High Court rejected their claims. They concluded:

6. [185]

   The Court then went on to consider whether the circumstance that the settlement was embodied in court orders was sufficient to attract the immunity, and held that it was not. That was because the terms of the settlement were not the result of the exercise of judicial power: see [59].

7. [186]

   Attwells was a case in which the parties were entirely free to reach whatever agreement they chose. Once they reached agreement, although the agreement resulted in orders being made by the Court, there was no judicial intervention in the content of the orders.

8. [187]

   That is not so in relation to orders under the FPA. Counsel for RHS pointed to Bartlett v Coomber [2008] NSW CA 100, in which Mason P, Hodgson JA and Bryson AJA all, in separate judgments, agreed that, in proceedings under the FPA, the Court is required to satisfy itself of the requirements of s 7 and s 9, the latter of which, in subs (2), required the Court to be satisfied of certain criteria before making an order. Their Honours accepted that this extended to an order made by consent. Mason P accepted that the Court had a power to reject a proposed settlement; Hodgson JA essentially agreed, but noted that, by reason of the agreement, the Court would generally be satisfied without the need for any significant investigation. Bryson AJA said:

9. [188]

   Counsel for RHS seized upon a reservation acknowledged by the majority in Attwells, stated as follows:

10. [189]

    RHS argued that, because there is a duty on the Court to satisfy itself of the various criteria set out in s 7 and s 9 of the FPA, such orders come within the reservation expressed. Anticipation of this reliance had given rise to earlier discussion, and some evidence from Ms Suttor and Mr Neal, concerning the role of the Registrar in mediated FPA proceedings.

11. [190]

    If – as I have found not to be the case – there was any breach of duty on the part of RHS in failing to file proceedings in relation to Anne Liprini’s estate prior to the mediation (ie the plaintiff’s primary case), the doctrine of advocates’ immunity would not protect RHS. The asserted breach is sufficiently removed from the outcome of the proceedings as not to be “intimately connected” with the conduct of the case and the outcome. The closer analogy is with legal practitioners who fail to commence proceedings within a statutory time limit.

12. [191]

    It is otherwise with respect to the plaintiff’s alternative case. The formulation of the orders had the necessary “intimate connection” with the conduct of the case and the outcome. That is particularly so when regard is had to the role of the Court, constituted by the Registrar, in the making of the orders.

Damages

1. [192]

   The question of damages may also be disposed of briefly. The plaintiff put his case on the basis of a lost chance of recovering the difference between the $770,000 agreed and the amount he finally recovered from Dr Liprini’s bankrupt estate. He invoked the principle stated in Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20. He acknowledged that the exercise involves a number of hypotheticals, including what Dr Liprini would have done (differently) at the mediation had proceedings been commenced, what he would have done if the proposed additional orders had been sought at the mediation of the claim, what the plaintiff would have done if he had been given different advice, and what would have occurred by way of enforcement had the orders been framed differently.

2. [193]

   The salient paragraph in Malec stated the approach to be taken in the assessment of damages on the hypothesis that a particular event did or did not occur. Deane, Gaudron and McHugh JJ said:

3. [194]

   The event the plaintiff hypothesises is the payment by Dr Liprini to him of the whole of the amount represented by the agreement at the mediation.

4. [195]

   I am satisfied that, no matter what proceedings had been commenced and no matter what orders had been formulated, Dr Liprini would have acted precisely as he did. That means that there was no chance that the plaintiff would have recovered the entirety of the $770,000.

5. [196]

   The plaintiff also claimed amounts referable to the litigation in which he became involved in seeking to enforce the settlement, including collateral litigation against Dr Liprini’s trustee in bankruptcy. In my opinion, that was not a consequence of any asserted breach of duty on the part of RHS at or prior to the mediation, but a consequence of Dr Liprini’s intransigence.

Concurrent liability

1. [197]

   I have indicated above that RHS relied upon the concurrent liability provisions of the CLA to adduce any damages found to be payable to the plaintiff. In the light of the various views expressed above, this question does not arise.

Orders:

1. [198]

   The orders I make are: