The NSW Court of Appeal has dismissed an appeal by the plaintiff from a judgment of the Supreme Court, which highlighted the importance of identifying a risk of harm and causation when establishing a claim in negligence against solicitors.
In issue
- Whether the plaintiff’s solicitors were negligent in failing to initiate court proceedings against an estate before participating in, and ultimately resolving at, mediation all claims, including arising under that estate; and
- In the alternative, whether the plaintiff’s solicitors could rely upon the defence of advocate’s immunity.
The background
Kevin Liprini (Kevin) was the eldest of two sons of James and Anne Liprini. James and Anne died in 2005 and 2006 (respectively) and pursuant to the terms of their wills Dr Allan Liprini, the younger son (Allan), was appointed as the sole executor and beneficiary of the estates. After his father's death in 2005, Keven retained Redmond Hale Simpson (RHS) to commence proceedings under the Family Provision Act 1982 (NSW) in which he claimed provision out of his father’s estate (the Estate Proceedings).
The Estate Proceedings were listed for mediation after the mother’s death, but before Kevin had taken any action with respect to her estate. While the Estate Proceedings had only been commenced in relation to the father's estate, the mediation was conducted on the basis that the parties would seek to resolve both estates.
The parties eventually reached a settlement and orders were made that Kevin was to receive provision out of his father’s estate in sum of $770,000, with the notation that the orders were agreed in contemplation of a claim against his mother’s estate. Allan failed to pay the agreed amount, and following a process of litigation, he became bankrupt. Eventually Kevin received a payment of $458,764 out of Allan’s bankrupt estate.
Kevin then commenced proceedings against RHS for his loss, alleging that his solicitors were negligent in failing to initiate proceedings in relation to the mother's estate before the mediation. Kevin also claimed that the orders settled at mediation were negligently formulated and resulted in his economic loss.
The decision at trial
At trial, the primary judge highlighted the importance of first identifying a relevant risk of harm in establishing a person's duty for a claim in negligence. The trial judge noted that it is this risk, as distinct from the harm that eventuates, that the plaintiff must demonstrate to have existed at the time that they claim the relevant precautions should have been taken.
Her Honour found that in this case, there was no risk of harm in proceeding to mediation rather than litigating, nor was there any risk of harm in formulating the terms of the orders as they were. Her Honour went on to note that neither party had adduced expert evidence that demonstrated a failure on the part of RHS to exercise reasonable care and skill.
The primary judge found that in any event, even if litigation had been commenced with respect to the mother’s estate, or the desired terms had been incorporated into the Estate Proceedings, a different outcome would not have been achieved; namely, Allan would still have defaulted on the payment and Kevin would not have recovered the full amount claimed. Kevin’s case therefore failed at the first stage of identifying a risk of harm, and again at the additional steps of breach of duty and causation.
Despite the above findings, the trial judge went on to consider, and reject, RHS’ argument that section 5O of the Civil Liability Act 2002 (NSW) (peer professional opinion on competent professional practice) applied, given the lack of evidence adduced on the competency of RHS’ ‘practice’. Her Honour also considered, and rejected, RHS’ argument that it was protected by advocate’s immunity. The Court found that the asserted breach of failing to initiate proceedings to the mother’s estate before mediation was too far removed from the outcome of the Estate Proceedings and accordingly, the advocate’s immunity did not apply.
Her Honour found in favour of RHS and ordered Kevin to pay RHS’s costs of the proceedings. Kevin appealed.
The issues on appeal
The main issue on appeal was whether the primary judge erred in not finding that RHS breached its duty of care and that causation had been established. In the event that Kevin’s appeal was successful, RHS’ defence of advocate’s immunity was also examined.
The decision on appeal
In a 2‑1 judgment, the appeal was dismissed with costs. Justice McCallum and Acting Justice Emmett found that:
- Kevin failed to establish the central question of the risk of harm. Justice McCallum noted that it was not clear what risk was said to have existed, or at what point it arose, against which the precaution of commencing proceedings against the mother’s estate should have been taken;
- Kevin failed to establish any breach of duty by the failure to take the precaution of commencing proceedings in relation to the mother’s estate;
- there was no causal connection between the negligence asserted and the loss claimed. A binding settlement was reached at the mediation and Kevin had the opportunity to enforce the settlement, which he ultimately did. While it may be the case that different enforcement steps could have been taken but for the failure to commence proceedings with respect to the mother’s estate, this did not form part of Kevin’s claim;
- Allan would have acted the same regardless of whether RHS had initiated proceedings with respect to the mother’s estate as there was no chance Kevin would have recovered the entirety of the $770,000; and
- RHS’ alleged breaches were covered by advocate’s immunity because they were intimately connected with the resolution of the proceedings by court decision conducted by the Registrar at the mediation.
Although he agreed that RHS enjoyed advocate’s immunity, Acting Justice McFarlane (in dissent) found that RHS breached its duty of care owed to Kevin and that there was causation.
Implications for you
This decision upholds the established principle that a claim in negligence will not succeed unless a plaintiff can first identify and establish a relevant risk of harm and the fundamental question of causation. The decision also upheld the established principle that in cases of solicitors’ negligence, the standard of care to be observed by a person with some special skill or competence is that of the ordinary skilled person exercising and professing to have that special skill and in appropriate circumstances, solicitors will be protected from suit pursuant to their advocate’s immunity.
