Spralja v Bullards [2017] VSCA 32 (3 March 2017)

Last Updated: 3 March 2017

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0031

STEVE SPRALJA	Applicant
v
DAVID ERNEST BULLARD and ANTHONY DAVID BULLARD (trading as ‘BULLARDS’ (a firm)) and GLENN CASEMENT and MICHAEL SCARFO	First Respondents Second Respondent Third Respondent

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JUDGES:	TATE, FERGUSON and McLEISH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 October 2016
DATE OF JUDGMENT:	3 March 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 32
JUDGMENT APPEALED FROM:	[2016] VCC 138 (Judge Saccardo)

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PRACTICE AND PROCEDURE — Negligence suit against solicitors — Settlement agreement — Scope of the advocate’s immunity — Summary dismissal — Significance of special leave to appeal having been granted in Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16; (2016) 331 ALR 1 — Effect of subsequent decision in Attwells on negligence suit — Whether judge should have deferred determination of summary dismissal application — Leave to appeal granted — Appeal allowed.

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APPEARANCES:	Counsel	Solicitors

For the Applicant	Mr V A Morfuni QC	James McConvill & Associates Pty Ltd

For the First Respondents	Mr D A Klempfner	Colin Biggers & Paisley Pty Ltd

For the Second and Third Respondents	Ms A J Golding	DLA Piper Australia

TATE JA

FERGUSON JA

McLEISH JA:

TABLE OF CONTENTS

*Introduction and summary* ................................................................................................	1

*Breach of sale agreement – the Kelly proceeding* .............................................	2

*The negligence suit against the lawyers* ........................................................	6

*The judge’s reasons* .............................................................................................................	10

*Grounds of appeal* ..............................................................................................................	14

*Did the negligence suit have no prospect of success?* ....................................................	14

*Was the judge in error in finding that the lawyers were entitled to rely on the advocate’s immunity?* ...............................................................................	17

*Should Judge Saccardo have delayed until Attwells was decided?* .....................	18

*Was Spralja denied procedural fairness?* ......................................................	21

*Conclusion on the application for leave to appeal* ..........................................	23

*Conclusion on the appeal* ..........................................................................	23

- - -

Introduction and summary

1 This is an application for leave to appeal from a decision of a judge of the County Court granting summary dismissal of a proceeding for damages brought against a firm of solicitors and two barristers on the ground that the solicitors and barristers were immune from suit by reason of the common law doctrine of the advocate’s immunity.[1] The allegedly negligent advice given by the solicitors and barristers related to the settlement of a proceeding for breach of a sale agreement. The judge’s orders were made before the High Court delivered judgment in Attwells v Jackson Lalic Lawyers Pty Ltd[2] although special leave had been granted. The application is brought principally on the ground that the judge erred in dismissing the proceeding on the ground that, as the solicitors and barristers were entitled to rely upon the doctrine of the advocate’s immunity, it had no real prospect of success and, in any event, given that special leave had been granted in Attwells, the judge ought to have delayed the delivery of judgment to await the outcome of the appeal in the High Court.

2 For the reasons that follow, we would grant leave to appeal [3] and allow the appeal.

Breach of sale agreement — the Kelly proceeding

3 Steve Spralja (‘Spralja’), the applicant, was the owner of a fishing permit which had attached to it a statutory fishing quota in respect of gummy shark, school shark, saw shark and elephant fish (‘the shark quota’). On 18 November 2005 Spralja entered into an agreement with Peter Kelly (‘Kelly’) to sell a fishing permit and attached shark quota for $645,000 plus GST ($709,500) (‘the sale agreement’). Following a dispute in regard to the terms of the sale agreement, and whether it extended to the transfer of certain separate statutory fishing rights, Kelly commenced proceedings against Spralja on 17 August 2007 seeking rectification, specific performance and damages (‘the Kelly proceeding’).[4] Spralja filed a defence and counterclaim suing Kelly for damages as a result of his alleged repudiation of the sale agreement. At that stage Spralja had retained Warren Graham & Murphy solicitors to act on his behalf.

4 From about November 2007, Glenn Casement of counsel (‘Casement’), the second respondent to the appeal, and Michael Scarfo of counsel (‘Scarfo’), the third respondent, had been briefed to advise and represent Spralja in the Kelly proceeding.

5 There was an unsuccessful mediation of the Kelly proceeding in December 2007 which resulted in the proceeding being fixed for hearing in the County Court of Victoria on 18 February 2008.

6 On 12 February 2008, Warren Graham & Murphy sought to cease acting as the solicitors for Spralja on the ground that they had a conflict of interest. At their request, David Ernest Bullard and Anthony David Bullard (trading as ‘Bullards’),[5] the first respondent, agreed to act for Spralja.[6]

7 On 15 February 2008, David Bullard sought an adjournment of the Kelly proceeding on the basis that Bullards had only been briefed for a week, they had not had an opportunity to take full instructions from Spralja, and the matter was not ready for trial. Judge Anderson adjourned the application, to be heard at the commencement of the trial on 18 February 2008. On 18 February David Bullard again appeared before Judge Anderson and applied for an adjournment of the trial. Judge Anderson ordered that the trial be adjourned to commence on 20 May 2008.

8 Immediately following the adjournment, there were negotiations between Kelly’s legal representatives and Bullards, Casement, and Scarfo, aimed at reaching a settlement of the Kelly proceeding. Kelly made an offer to pay $645,000 plus GST ($709,500) for the transfer of the fishing permit with attached shark quota and separate statutory fishing rights (‘the offer’).

9 Spralja alleges that David Bullard, Casement, and Scarfo advised him to accept the offer. Casement admits that the lawyers advised Spralja that the offer made was within the range that Spralja might have reasonably expected to recover in the trial.

10 Written terms of settlement of the Kelly proceeding were signed by the parties on 19 February 2008 reflecting the terms of the offer (‘the terms of settlement’). The terms of settlement provided for Kelly, upon being registered as owner of certain fishing rights, to discontinue the proceeding, and Spralja to discontinue his counterclaim, with no order as to costs.

11 Spralja has refused to comply with the terms of settlement, asserting that he had been compelled to sign by Bullards, Casement, and Scarfo. The Kelly proceeding was not discontinued and nor was the counterclaim. Spralja argues that he was unable to give proper instructions or understand legal advice and was, at the time of the negotiations, suffering from frequent seizures which left him unconscious for short periods of time and dazed thereafter.

12 The Kelly proceeding returned to the County Court on 20 May 2008. This was the date fixed for trial by Judge Anderson on 18 February. The statement of claim in the Kelly proceeding was amended on 20 May 2008 to include a cause of action based upon the terms of settlement. The prayer for relief was amended to delete reference to the sale agreement and substitute the terms of settlement. This was followed by a later amended defence and counterclaim [7] in which Spralja denied that he had agreed to the terms of settlement.

13 On 12 June 2008, upon an application by Kelly, Judge Anderson entered judgment for Kelly against Spralja declaring that the written terms of settlement were valid and enforceable (‘the Kelly judgment’).[8] On that occasion both Kelly and Spralja were represented by new counsel. The orders recorded that they were obtained ‘at trial before a judge without a jury commencing 12 June 2008’. They make reference to the court appearance on 20 May 2008 and further provide:

THE JUDGMENT OF THE COURT IS THAT:

There will be judgment for the plaintiff [Kelly] against the defendant [Spralja] for a declaration that the written terms of settlement between the plaintiff and the defendant, dated 19 February 2008, being exhibit DJF1 to the affidavit of David Fitzpatrick, sworn 19 May 2008 and together with the transfer documents, being forms with the identifiers GP, TC, SDW and SESS, comprising six pages and forming part of exhibit DJF5 to the said affidavit of David Fitzpatrick, are valid and enforceable.
Reserve liberty to the parties to apply in relation to the following matters:

(a) An order that the defendant forthwith give written confirmation to the Australian [F]isheries Management Authority (‘AFMA’) that the terms of settlement are valid and enforceable against him and that AFMA should proceed to process the AFMA fish quota and permit transfer forms referred to in and annexed to the terms of settlement signed by the defendant and lodged with AFMA by the plaintiff, and to register in the name of the plaintiff the quota units referred to in the transfer forms;
(b) An order that the defendant forthwith upon being entitled to do so, apply to AFMA for the Quota Statutory Fishing Rights (‘SFRs’) which will be issued by AFMA pursuant to the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 in lieu of the quota rights held by the defendant, and upon obtaining such SFRs, forthwith ... transfer ownership of them to the plaintiff, and pending such transfer hold the SFRs on trust for the plaintiff and refrain from encumbering them in any way; and
(c) An order that the defendant forthwith upon request execute any further transfer or other document and do any act or thing reasonably required by the plaintiff in order to bring about the registration by AFMA of the quota (including without limitation the quota statutory fishing rights and SFRs) as those items are defined in the terms of settlement into the name of the plaintiff on a continuing basis;
(d) The question of the award and amount of any damages, including damages or compensation in respect of any loss or damage suffered by the plaintiff as a result of any breach, attempted breach, repudiation or attempted repudiation by defendant of terms of settlement;
(e) Generally.

Order that the defendant pay the plaintiff’s costs of the proceeding from 19 February 2008, comprising the delivery of an amended statement of claim, the preparation of the said affidavit of Mr Fitzpatrick, perusing the two versions of the defendant’s amended defence and counterclaim, and the costs of the appearances before the Court on 20 May 2008 and of today, fixed at $6,000.

4. Stay execution upon the order for costs for one month.

The negligence suit against the lawyers

14 On 13 February 2014, Spralja commenced proceedings against Bullards, Casement and Scarfo for alleged breaches of retainer and breaches of duty of care in allegedly failing to explain properly the terms of the offer, failing to advise properly whether the offer was fair and reasonable, and failing to advise properly on the implications of the terms of settlement, amongst other things (‘the negligence suit’).

15 On 13 January 2015, Spralja’s then solicitors, LAC Lawyers Pty Ltd, filed a Notice of Solicitor Ceasing to Act. On 13 March 2015, Judge Saccardo extended the period of validity of Spralja’s originating process. In June 2015 Bullards, Casement and Scarfo sought summary dismissal of the negligence suit.[9]

16 The application for summary dismissal was heard by Judge Saccardo on 17 November 2015.

17 During the hearing, Bullards informed the judge that the High Court had granted special leave to appeal in Attwells in August 2015 and that Attwells raised the question whether the scope of the doctrine of the advocate’s immunity extended to advice given with respect to agreements between parties to litigation to settle the dispute. It was acknowledged that the appeal in Attwells was expected to be heard in March 2016, with a decision to follow some months later.

18 At the conclusion of the hearing, Judge Saccardo indicated that he wanted to consider whether he should delay preparing his reasons until after the High Court had determined the appeal in Attwells.

19 On 26 November 2015, Judge Saccardo ordered (‘the 26 November orders’) that:

Judgment in the application of the Defendants [Bullards, Casement and Scarfo] is reserved pending the decision of the High Court in Attwells v Jackson Lalic Lawyers Pty Ltd (No S 161 of 2015).
The proceeding is stayed pending the determination of the application by the Defendants.
Liberty is reserved to the parties to apply generally to his Honour Judge Saccardo as to this order.

20 Following the 26 November orders, there was further communication between the parties and the judge. On 8 December 2015, Bullards sent an email to Judge Saccardo’s chambers attaching a copy of Geelong Football Club Ltd v Clifford [10] and submitting that it was appropriate for his Honour to determine the application based on the current state of the law. In Clifford’s case this Court (Ormiston and Callaway JJA) held that a trial judge who had vacated a trial date and adjourned proceedings indefinitely, to await the outcome of a possible grant of special leave to the High Court, had wrongly exercised the court’s discretion.

21 Spralja sent an email on 9 December 2015 in which he stated that Clifford’s case had no relevance.

22 Through his associate, Judge Saccardo indicated via email on 9 December 2015 that he would delay the ruling until the new year to allow for further enquiries to be made as to the timing of the appeal in Attwells. He also invited the parties to make submissions on this course. On the same day, he directed that the proceeding be set down for trial on 22 August 2016.

23 On 16 December 2015, Casement and Scarfo sent an email to the associate to Judge Saccardo inviting consideration of a medical report, which they attached, by Professor Richard Gerraty, neurologist, about Scarfo’s medical condition which was severe and ongoing. Eliminating formalities and personal details, the report said:

I understand that Mr Scarfo has a case against him and that the judge has deferred his decision in favour of waiting for the outcome of a different case in a higher court. While this might seem to be just and wise, it does have a particular adverse effect in Mr Scarfo’s case.
...
Mr Scarfo knows of the case and the matter weighs heavily on him and therefore is of significant stress for his wife as well. I do think it would be very reasonable for the court to consider Mr Scarfo’s plight. If the judge were to make his determination sooner than the envisaged conclusion of the High Court matter, an earlier judgment would possibly lift one burden from Mr Scarfo and his family, amongst the many burdens that cannot be lifted. This would be a point of justice and mercy for any citizen, but especially for one who previously served the courts himself.

24 On 17 December 2015 Casement and Scarfo sent Judge Saccardo a copy of the decision of the New South Wales Court of Appeal, Stillman v Rusbourne,[11] which had been delivered the day before and had applied the established authorities on the advocate’s immunity. The judge’s associate responded on the same day, stating that his Honour had indicated that ‘pending any further submissions this week from the plaintiff [Spralja] on this issue, he will likely be able to deliver his judgment in the matter by late February 2016’.

25 On 3 February 2016 his Honour’s associate sent an email to the parties advising that the judge proposed not to delay the handing down of his ruling pending the appeal in Attwells, and expected to be in a position to deliver his ruling by the end of February. The email noted that inquiries of the High Court registry revealed that the appeal in Attwells was listed for hearing on 8 March 2016. The email went on to say the following:

On 8 December 2015, his Honour was referred ... to the decision of the Court of Appeal in Geelong Football Club Ltd v Clifford [2002] VSCA 212 in which the Court stated that primary decisions of courts should not be delayed pending the outcome of appellate decisions.
Further, on 16 December 2015 a medical report was provided on behalf of the second defendant [Scarfo] attesting to the critical level of his health and the benefit which would be served by the resolution of this matter without delay.
For these reasons, His Honour proposes not to delay the handing down of his ruling in this matter pending the decision of the High Court and expects to be in a position to deliver his ruling by the end of this month.
When delivering his ruling, His Honour proposes to adopt the position put on behalf of the defendants by Counsel, namely that should the defendants’ summons be upheld, the proceeding will not be dismissed outright but will be permanently stayed, preserving the right of the plaintiff to make application to vary the order staying the proceeding.
Should the parties wish to address His Honour as to any of the matters referred to above, they should do so by return email by 4pm on Tuesday 9 February 2016. Upon receipt of any such email, His Honour will consider whether a Directions Hearing should be convened to deal with any matters raised by the parties. If not, the parties will be notified once His Honour is ready to deliver his ruling.

26 By email dated 7 February 2016 Spralja urged the judge to permit the matter to proceed to trial.

27 Bullards, with the support of Casement and Scarfo, by email dated 8 February 2016, submitted that, should the judge uphold their summonses, the appropriate order would be for the dismissal of the proceeding and not a permanent stay, in the interests of finality and to address the lengthy delay since the date of the events that gave rise to the negligence suit (February 2008).

28 On 9 February 2016 Spralja sent an email to the judge’s chambers asserting that the lawyers had engaged in a ‘deliberate scheme’.

29 By email dated 15 February 2016 the associate confirmed to the parties that his Honour intended to deliver judgment by the end of February and that they would be notified of the exact listing date and time. She indicated that, in the event that the application was successful, the judge would hear the parties as to whether it was appropriate to make any ancillary orders pending the outcome of the decision in Attwells.

30 On 16 February 2016 Spralja sent an email repeating his allegation that he was forced to sign an unlawful settlement, without being able to read it first.

31 The parties received notice on 19 February 2016 that the ruling would be delivered on 25 February 2016. On 25 February 2016, Judge Saccardo granted the application for summary judgment and dismissed the proceedings with costs.[12]

32 The High Court handed down its decision in the Attwells appeal on 4 May 2016.

The judge’s reasons

33 The judge concluded that the negligence suit had no prospect of success given that each of the lawyers was entitled to the protection of the advocate’s immunity. He considered s 62 of the Civil Procedure Act 2010 which provides for a defendant to apply for summary judgment on the ground that a plaintiff’s claim has no real prospect of success. He considered the power the court has to grant such an order under s 63 and the interpretation given by this Court in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [13] with respect to the approach to be adopted to an application under s 63, namely, that the test is whether ‘the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success’.[14] The test is to be applied with fidelity to the statutory language and ‘without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel’.[15] There was no dispute with respect to the nature of the test to be applied.

34 He noted that the application for summary judgment was based on the assertion that Spralja’s claim was barred. This was:

... by reason of the application of the doctrine of advocate’s immunity, which in turn is based upon the well-established principle that a legal practitioner cannot be sued in negligence for what might in summary form be referred to as negligence by a legal practitioner with respect to work done ‘in-court’ or ‘work done out of court which leads to a decision affecting the conduct of a case in court’.
It is clear that if the defendants’ argument is made out, the doctrine of advocate’s immunity would provide the defendants with immunity from the plaintiff’s claim.^[16]

35 He considered the scope of the advocate’s immunity as identified in Giannarelli v Wraith [17] and D’Orta-Ekenaike v Victoria Legal Aid,[18] namely that it applies to ‘work which is intimately connected with in-court conduct and/or which leads to a decision affecting the conduct of the case in court’.[19] He emphasised the principle underlying the doctrine of the advocate’s immunity, that judgments of a court ‘are final and that there should be no inconsistency in judicial findings between members of the same court’.[20] He considered that the effect of the Kelly judgment was to invoke the principle that judgments of a court should not be revisited because that would offend the principle of finality and would create an unacceptable risk that the trial judge may make findings as to the validity of the terms of settlement that were different from the findings made by Judge Anderson as recorded on 12 June 2008.

36 In his consideration of the Kelly judgment, the judge noted that an issue arose as to whether that judgment was entered by consent or as a result of a determination of the merits of the dispute by the Court:

Whilst the judgment is recorded as having been made at the trial of the proceedings, my enquiries of the Registry suggest that the judgment did not involve a determination upon the merits.^[21]

37 He concluded that there was no determination on the merits in the light of his recognition that the lawyers carried the onus in this instance and that this was the position most favourable to Spralja.

38 He turned to a consideration of the nexus between the work done by the lawyers and the Kelly proceeding. The question he posed for himself was

whether the defendants’ alleged negligence occurred whilst they were carrying out work which was “’work intimately connected with’ work in a court” and/or “which leads to a decision affecting the conduct of a case in court”.^[22]

39 He was satisfied that the defendants’ work was connected sufficiently to the conduct of the trial in the Kelly proceeding to attract the immunity because:

(1) the retainer of each of the defendants ... was limited to the presentation of the plaintiff’s defence in the trial of the Kelly proceeding;
(2) the resolution of the trial in the Kelly proceeding [was] by the signing by the parties of the terms of settlement;
(3) the judgment of the Court [was] entered on 12 June 2008 in the Kelly proceeding which upheld the validity of the terms of settlement.^[23]

40 He was supported in his approach by the reasoning of Bell J in Goddard Elliott v Fritsche.[24] In particular, he noted that Bell J held, after engaging in an extensive survey of the authorities, that Giannarelli and D’Orta-Ekenaike ‘should be interpreted as extending to the giving of settlement advice which leads to the making of orders by the Court’.[25] In particular, the judge stated:

I am satisfied in this instance that I should follow the decision by Bell J in Goddard Elliott that the current position of the High Court which I must follow is that the defence of advocates’ immunity applies to the giving of settlement advice which leads to the making of orders by the Court.^[26]

41 He went on to consider whether the immunity also applied in situations where the client lacks the mental capacity to give instructions to his or her lawyers. He followed the reasoning of Bell J in Goddard Elliott and held that the advocate’s immunity from suit applies in such situations.[27]

42 Ultimately, he found that the lawyers were retained to represent Spralja in a trial initiated by Kelly; the Kelly proceeding was resolved through the terms of settlement; notwithstanding Spralja’s assertion that the terms of settlement were invalid, the declaration by Judge Anderson of 12 June 2008 ‘determined that matter’;[28] ‘the work performed by the defendants the subject of the claim is appropriately categorised as being work done out of Court which led to a decision affecting the conduct of the case in Court’;[29] and, ‘the defence of advocate’s immunity applies to that work even if it was undertaken in circumstances in which the plaintiff did not have the mental capacity to give instructions to his lawyers’.[30] He concluded that the lawyers were each entitled to claim the advocate’s immunity and that therefore Spralja’s claims against them had no prospect of success, from which it followed that the lawyers were entitled to summary judgment in their favour.[31] He invited the parties to make submissions on the terms of the orders to be made given the pending appeal in Attwells.

43 At the delivery of judgment Spralja remained self-represented. When orders were sought for the dismissal of the proceeding, rather than a permanent stay, Judge Saccardo made it plain to Spralja that he had made his decision on the basis of the law as it stood at that time and that Spralja had a right to appeal the decision to correct any error. He offered to provide Spralja with the address of the Court of Appeal to facilitate the exercise of Spralja’s right of appeal. He said:

Mr Spralja, the end point of this process is that my ruling really has the effect of making a finding that in this case because of the law as it stands at the present time advocate’s immunity applies and the case has no prospect of success because of the defence. Now, I want to make it clear that in making that finding I’ve done so on the basis that the starting point is I look at the allegations that you’ve made in your statement of claim and I assume that all of those allegations are true but I’ve made no finding about it ...
The problem is the law, not the facts of the case. So I can’t do anything about the law, I’m bound to follow the High Court. Now, the end point of this is that if you want to do anything about my ruling in this case you can but not in this court. You have to go to the Court of Appeal and you have to lodge an appeal against my ruling. And the Court of Appeal might say I’m wrong, they might agree with your position but you need to do that fairly quickly. You’ve got 14 days to appeal my ruling.
Now, we’ll give you the address of the Court of Appeal. You can go and see the registry this morning, they’ll give you information about what you need to do to start an appeal, if you wish to start an appeal.

Grounds of appeal

44 There are four proposed grounds of appeal.

(1) The judge erred in law in dismissing the proceeding on finding that Spralja’s cause had no real prospect of success;
(2) The judge erred in law in finding that, on the facts of this case, the lawyers were entitled to rely on the advocate’s immunity;
(3) Having regard to the fact that the High Court of Australia had granted special leave in the case of Attwells in which the doctrine of advocates’ immunity was to be re-examined the judge should not have found that Spralja’s proceeding had no real prospect of success; and
(4) Spralja was denied procedural fairness in that he was unrepresented and the judge, having ordered on 26 November 2015 that he would not make an order dismissing Spralja’s claim, was obliged, if he intended to depart from that course, to provide Spralja with a proper opportunity to be heard.^[32]

45 Spralja was granted leave to rely upon the fourth ground of appeal during the course of the hearing of the appeal. Directions were made for the filing of further submissions addressing this ground.

Did the negligence suit have no prospect of success?^[33]

46 In Attwells the High Court clarified the scope of the doctrine of the advocate’s immunity. The majority (French CJ, Kiefel, Bell, Gageler and Keane JJ) recognised that the foundation of the immunity relates to the exercise of judicial power.[34] The protection afforded by the immunity arises out of the connection between a lawyer’s work and the judicial determination of a controversy for which a court is responsible. It does not extend to the compromise or settlement of a proceeding, even where that settlement is recorded in consent orders by a court, because the substantive resolution of the dispute does not involve the exercise of judicial power by a court.

47 The majority held that ‘the intimate connection required to attract the immunity is a functional connection between the advocate’s work and the judge’s decision’.[35] While they considered that the nexus identified in Giannarelli and D’Orta-Ekenaike whereby protection is afforded to legal work connected with in-court conduct, remains the authoritative test,[36] they held that the test ‘is not satisfied where the work of the advocate leads to an agreement between parties to litigation to settle their dispute’.[37] They went on to say:

No doubt an advice to cease litigating which leads to a settlement is connected in a general sense to the litigation which is compromised by the agreement. But the intimate connection required to attract the immunity is a functional connection between the advocate’s work and the judge’s decision. As Mason CJ said in Giannarelli, the required connection is between the work in question and the manner in which the case is conducted in court. Both D’Orta and Giannarelli were concerned with claims which impugned a judicial determination to which the allegedly negligent work of the advocate contributed. ... the public policy, protective of finality, which justifies the immunity at the same time limits its scope so that its protection can only be invoked where the advocate’s work has contributed to the judicial determination of the litigation.^[38]

48 The majority dealt specifically with the situation whereby a settlement is embodied in consent orders made by a court:

in order to attract the immunity, advice given out of court must affect the conduct of the case in court and the resolution of the case by that court. The immunity does not extend to preclude the possibility of a successful claim against a lawyer in respect of negligent advice which contributes to the making of a voluntary agreement between the parties merely because litigation is on foot at the time the agreement is made. That conclusion is not altered by the circumstance that ... the parties’ agreement was embodied in consent orders.^[39]

49 The majority held that a consent order does not have the effect of bringing the actions undertaken as part of settlement negotiations within the scope of the immunity because the consent order ‘has nothing to do with the substantive content of the rights and obligations established’[40] by the settlement agreement because ‘[t]he substantive content of those rights and obligations was determined by the parties without any determination by the court’.[41] In the circumstances of Attwells ‘the terms of the settlement agreement ... were not, in any way, the result of the exercise of judicial power’.[42] The majority emphasised that ‘[t]he consent order may have facilitated the enforcement of the compromise, but it was the agreement of the parties that settled its terms’.[43]

50 Judge Saccardo did not have the benefit of the clarification given to the scope of the advocate’s immunity by the High Court in Attwells.[44] He applied the immunity in a manner that understood its scope as extending to the legal work carried out in the course of advising upon, and reaching, the settlement of the Kelly proceeding on the assumption that work relating to a settlement had, without more, a sufficient nexus to the conduct of a case in court.[45] This approach was the foundation of his conclusion that the suit against the lawyers had no real prospect of success. The approach has now been shown to be in error by the High Court in Attwells. Viewed in the light of Attwells, Judge Saccardo was in error in his appreciation of the breadth, and foundation, of the immunity. During the course of the hearing of the appeal, Casement and Scarfo acknowledged that the immunity, being a common law doctrine, was subject to judicial clarification and reformulation over the course of time even if the limits of the immunity have not always been clearly understood in the manner that now prevails.

51 It follows that we accept ground 1 of the grounds of appeal. For the reasons given, when the law as revealed by Attwells is applied, it cannot be concluded that the negligence suit brought by Spralja has no real prospect of success.

Was the judge in error in finding that the lawyers were entitled to rely on advocates’ immunity?^[46]

52 Ground 2 invites a substantive consideration of whether the immunity applies in the circumstances of the case. Spralja submits that the entry into the terms of settlement did not mean that there had been a judicial determination of the rights and obligations established by the settlement agreement. He relies upon Attwells for the bald proposition that consent orders are not a judicial determination. Bullards, Casement and Scarfo submit that there remains a factual question as to whether the Kelly judgment was obtained by consent or whether it was an adjudication on the merits. They submit that the conclusion of Judge Saccardo that ‘the Court records suggest that the terms of the Kelly judgment were recorded by consent’[47] is contrary to both the Court record of the orders made in the Kelly proceeding[48] and his Honour’s summary of Spralja’s position that ‘he [Spralja] did not consent to the making of the Orders the subject of the Kelly judgment’.[49]

53 The circumstances surrounding the orders made by Judge Anderson on 12 June 2008 remain factually unclear. The question of the status of the Kelly judgment, as reflecting the consent of the parties or involving a judicial determination on the merits, was not properly agitated below. It would not be appropriate for this Court now to seek to apply Attwells to the circumstances of the case when these factual issues remain unresolved. There may also be other factual issues which need to be addressed when the appropriate time arises for a court to engage in a substantive consideration of the immunity.

54 Ground 2 is unnecessary to decide.

55 The acceptance of ground 1 is sufficient for the disposition of the appeal. However, as there was full argument on grounds 3 and 4, we proceed briefly to consider those grounds.

Should Judge Saccardo have delayed until Attwells was decided?^[50]

56 Spralja submits that the judge ought to have delayed the delivery of judgment until the appeal in Attwells had been decided because it was in the interests of justice for him to do so, or to have granted a different form of relief to dismissal, for example, a stay of the proceeding, which could have been revisited depending upon the outcome in Attwells. At times this was expressed as a submission that the judge ought to have adjourned the matter.

57 In response, Bullards, Casement and Scarfo submit that Spralja made no formal application for an adjournment and that seeking any indeterminate deferral would have run foul of his overarching obligation to act promptly and minimise delay pursuant to the Civil Procedure Act. Furthermore, for the judge to have deferred the judgment would have permitted Spralja to benefit from the length of his delay in suing the lawyers.[51]

58 They point to the observation of Ormiston JA in Clifford’s case that potential changes in the law, including by way of judicial development, ought not postpone the hearing of a matter ready for trial:

Generally speaking, however, a possible change in the law, whether judicial or legislative, is not to be treated as justification for failing to hear a case fixed and ready for trial.^[52]

59 Ormiston JA went on to note, as Judge Saccardo did here, that if, ultimately, a decision is made in error, this can be corrected through the appeal process:

If there is an error in principle here, then the unsuccessful party can appeal the outcome and the answer to that appeal may lie in the High Court’s decision ... As I have said, if this proceeding turns out to have been decided on a wrong principle, that can be corrected appropriately.^[53]

60 To somewhat similar effect McColl JA (with whom Beazley and Tobias JJA agreed) said, in City of Sydney Council v Satara,[54] that ‘the Court should deal with the law as it is, rather than speculate about changes in the law’.[55] Her Honour referred to the remarks of Starke J in Ramsay v Aberfoyle Manufacturing Co (Australia) Pty Ltd[56] that:

Courts of law, however, can only act upon the law as it is, and have no right to, and cannot, speculate upon alterations in the law that may be made in the future.^[57]

61 The observations of Simpson JA of the New South Wales Court of Appeal in Stillman support this view.[58] In Stillman legal advice was given for the purpose of a mediation of a Supreme Court proceeding during which an offer to settle was accepted. The terms of settlement could ultimately not be fulfilled and proceedings were commenced against the legal advisors for negligent advice. At first instance, in June 2014, an order was made for summary dismissal of the proceeding on the ground that the giving of the advice complained of was work leading to the conduct of the case in court and was therefore protected by the immunity. The matter went on appeal before special leave was granted in Attwells but judgment was delivered after the grant of special leave.[59] The majority (Gleeson and Simpson JJA) refused leave to appeal on the basis of what they described as the application of an orthodox understanding of the scope of the advocate’s immunity.[60] Simpson JA referred to the grant of special leave in Attwells but considered that a grant of special leave does not warrant the Court of Appeal departing from what it takes to be established authority. Her Honour said:

One troubling feature is that the High Court has granted special leave to the respondent in Jackson Lalic to appeal: Attwells & Anor v Jackson Lalic Lawyers Pty Ltd [2015] HCATrans 176 (7 August 2015). That, however, is not a relevant circumstance upon which to base a departure from the authority of Jackson Lalic and previously decided cases. It is understood that a date was fixed for the hearing of the appeal in Jackson Lalic, but, unfortunately, had to be vacated. For the present, Giannarelli, D’Orta-Ekenaike and, most recently, Jackson Lalic, state the law to be applied by this Court.^[61]

62 In our view, there is no obligation to grant an adjournment by reason of the grant of special leave in a matter raising substantially similar issues. Where an application for an adjournment is made, and it is considered that refusal is the most appropriate course, then we agree that the issues in the proceeding should be determined as the law stands. However, a judge may, in the individual circumstances of a case, determine that an adjournment of the proceeding is the better course. The grant of an adjournment is almost invariably a matter within a judge’s discretion. It is a decision of practice and procedure, dependent upon the individual circumstances of the case, and ‘an appeal court will exercise particular caution before interfering with an exercise of discretion in relation to practice and procedure’.[62] It is apparent that Judge Saccardo’s decision to delay delivery of judgment until after the appeal in Attwells had been determined, recorded in the 26 November orders, was based upon his concern that judgment in Attwells might include a judicial clarification of the law that could affect his substantive determination of whether the immunity was attracted. His ultimate decision to deliver judgment in February 2016 was based upon his consideration of the critical ill-health of one of the lawyers. We consider that no objection can be sustained to his Honour’s process of decision-making or his decision to proceed with delivery of judgment. In particular, we consider that his Honour was entitled to take into account Scarfo’s ill-health as one of the myriad considerations relevant to the question of whether to delay the delivery of judgment. Amongst the other considerations the judge took into account was the fact that error can be corrected on appeal. This is a consideration identified by Ormiston JA in Clifford’s case[63] and to which the judge specifically adverted at the time of delivery of judgment.[64]

63 We consider that, in the circumstances, the judge was not under an obligation to delay the delivery of judgment or otherwise adjourn the proceeding. We reject ground 3.

Was Spralja denied procedural fairness?^[65]

64 Spralja submits that the judge, having made the 26 November orders,[66] and then deciding to take a course contrary to that anticipated by those orders by delivering his judgment before the determination of the Attwells appeal, breached his obligation to afford procedural fairness. He submits that, as a self-represented litigant, the judge’s obligation to provide him with a fair opportunity to prepare and present his case extended to providing him with such assistance as was necessary to ensure a fair trial.

65 He claims that he did not comprehend that, after the 26 November orders were made, there was a possibility that the judge would change his mind as to the date of delivery. He accepts that there was a staged process of communication with the judge after the 26 November orders [67] but argues that it was not clear from the exchange of emails, described above, on what issue the judge was inviting further submissions. In particular, he did not understand that the delay of the delivery of judgment was an outstanding issue on which he could make submissions or that at the time the judgment was delivered he had an opportunity to make submissions on the appropriate form of relief to be granted. In the circumstances, he argues, procedural fairness required greater guidance.

66 Bullards, Casement and Scarfo submit that the staged process of communication after the 26 November orders gave Spralja an opportunity to:

(1) consider the arguments and issues being raised by the judge and the lawyers in the various emails without the pressure of being in court; and

(2) make further submissions, and/or indicate whether he wished to make further submissions.

67 They also emphasise that the judge repeatedly invited the parties to make further submissions, or to indicate whether they wished to do so. This was apparent from the emails from the judge’s chambers on 9 December 2015,[68] on

17 December 2015[69] and on 3 February 2016.[70] Spralja did make submissions on a number of occasions, including his email of 9 December 2015,[71] his email of

7 February 2016,[72] his email of 9 February 2016[73] and his email of 16 February 2016.[74]

68 In our view, it is apparent from the emails from the judge’s chambers that his Honour raised in clear terms that there was a debate about whether he should decide the matter on the basis of established authority or await the High Court’s determination. In particular, the judge’s associate, in the email of 3 February 2016,[75] made it clear that there were a large range of considerations relevant to whether delivery should be delayed, including Scarfo’s health. While Spralja’s emails at times suggest that he thought he was being invited to make further submissions on the substantive question of the immunity, we consider that, overall, the judge gave Spralja adequate opportunity to make submissions in support of the proposition that judgment should be delayed. In our view the judge went to considerable lengths to ensure that all parties were aware at all times of what he was inclined to do and had proper opportunities to persuade him otherwise. While the differences in the form of relief that could be ordered may not have been fully explained to Spralja, we consider that at all times the judge was keen to protect Spralja’s interests as a self-represented litigant. Indeed, his recognition that Spralja could appeal his decision[76] and his preparedness to facilitate Spralja’s right of appeal, was itself an expression of how keenly he was conscious of the desirability of protecting Spralja’s interests.

69 In our view, there was no breach of procedural fairness. We reject ground 4.

Conclusion on the application for leave to appeal

70 Leave to appeal should be granted on the basis that the appeal has a real prospect of success; that is, it cannot be said that the prospects of the appeal are no more than fanciful.[77]

Conclusion on the appeal

71 It has come to our attention since the date of the hearing that an application has been made to the High Court to reopen Attwells.[78] The matter, including the application for leave to re-open, was reserved after full argument and remains reserved. Nevertheless, for the reasons we have given above, we consider that it is appropriate for this Court to proceed to deliver judgment. No application to the contrary has been made to us.

72 We allow the appeal. The orders of Judge Saccardo made 25 February 2016 are set aside and in lieu thereof the application for summary judgment is dismissed.

---

^[1] Spralja v Bullards [2016] VCC 138 (‘Reasons’).

^[2] [2016] HCA 16; (2016) 331 ALR 1 (‘Attwells’).

^[3] In what follows, it is convenient to refer to the application for leave to appeal as simply ‘the appeal’.

^[4] Reasons [2] .

^[5] On occasion we refer to Bullards, Casement and Scarfo collectively as ‘the lawyers’.

^[6] This was put into effect by Bullards who filed a Notice of Change Practitioner in the Kelly proceeding on 13 February 2008.

^[7] This was after the termination of Bullards’ retainer in March 2008. The amended defence and counterclaim were filed on 2 June 2008.

^[8] Reasons [21].

^[9] The applications were made by summons. Bullards’ summons was dated 29 June 2015 and Casement and Scarfo’s summons was dated 25 June 2015. Judge Saccardo treated the applications largely as one and we have adopted the same approach.

^[10] [2002] VSCA 212 (‘Clifford’s case’).

^[11] [2015] NSWCA 410 (‘Stillman’).

^[12] Reasons [39].

^[13] [2013] VSCA 158; (2013) 42 VR 27 (‘Lysaght’).

^[14] Ibid 39 [29], 40 [35(a)].

^[15] Ibid 40 [35(b)]; see also at 38 [27].

^[16] Reasons [6]-[7].

^[17] (1988) 165 CLR 543 (‘Giannarelli’).

^[18] [2005] HCA 12; (2005) 223 CLR 1 (‘D’Orta-Ekenaike’).

^[19] Reasons [23], citing D’Orta-Ekenaike [2005] HCA 12; (2005) 223 CLR 1, 31 [86].

^[20] Reasons [14]; see also at [13].

^[21] Ibid [20].

^[22] Ibid [25], citing D’Orta-Ekenaike [2005] HCA 12; (2005) 223 CLR 1, 31 [86] (emphasis in original).

^[23] Reasons [26]; see also at [10].

^[24] [2012] VSC 87 (‘Goddard Elliott’).

^[25] Reasons [27]. However, it should be noted that Bell J qualified his conclusion by observing that, in the circumstances of the case, the orders made by the trial judge in the Family Court involved ‘a consideration of the merits’, that is, the judge ‘exercised his judicial responsibility to make the consent orders only after finding them to be “just and equitable” ‘: Goddard Elliott [2012] VSC 87 [812], [816]. In the survey of authorities Bell J undertook he noted specifically that one approach was that ‘if a case is settled without a hearing and the court does not pronounce a judgment on the issues, the public policy consideration of ensuring finality and preventing re-litigation of matters which have been judicially determined is not engaged’: Goddard Elliott [2012] VSC 87 [807]. He also said: ‘If it was open to me to accept these arguments I would do so’; Goddard Elliott [2012] VSC 87 [811]. However, he considered that Giannarelli and D’Orta-Ekenaike precluded him from distinguishing between various kinds of binding court orders.

^[26] Reasons [28] (emphasis added). He also relied upon Chamberlain v Ormsby [2005] NSWCA 454 [120]-[121] to similar effect.

^[27] Reasons [32].

^[28] Ibid [37].

^[29] Ibid.

^[30] Ibid [34].

^[31] Ibid [38].

^[32] The grounds of appeal have been modified in light of matters already defined.

^[33] Ground 1.

^[34] Nettle and Gordon JJ were in dissent.

^[35] Attwells [2016] HCA 16; (2016) 331 ALR 1, 4 [5].

^[36] See especially Giannarelli (1988) 165 CLR 543, 559-60 (Mason CJ); D’Orta-Ekenaike [2005] HCA 12; (2005) 223 CLR 1, 56 [168].

^[37] Attwells [2016] HCA 16; (2016) 331 ALR 1, 4 [5].

^[38] Ibid.

^[39] Ibid 4 [6] (emphasis added). A contrary view was expressed by Nettle J to the effect that ‘where a matter is settled out of court on terms providing for the court to make an order by consent that determines the rights and liabilities of the parties, the settlement plainly does move the litigation towards a determination by the court’: Attwells at 16 [67]. See also Gordon J to similar effect: Attwells at 28 [126].

^[40] Ibid 15 [59].

^[41] Ibid.

^[42] Ibid.

^[43] Ibid 16 [62].

^[44] We consider below whether he should have delayed the delivery of judgment until after the appeal in Attwells was determined. See [56]–[63] below.

^[45] See [39] above.

^[46] Ground 2.

^[47] Reasons [35].

^[48] See [13] above.

^[49] Reasons [15].

^[50] Ground 3.

^[51] The events complained of occurred in February 2008. Spralja commenced the proceeding against the lawyers in February 2014.

^[52] [2002] VSCA 212 [7].

^[53] Ibid [8].

^[54] [2007] NSWCA 148 (‘Satara’).

^[55] Ibid [20].

^[56] [1935] HCA 75; (1935) 54 CLR 230.

^[57] Ibid 253, cited in Satara [2007] NSWCA 148 [19].

^[58] [2015] NSWCA 410.

^[59] The appeal in Stillman was heard on 29 June 2015, special leave was granted in Attwells in August 2015 and judgment was delivered in Stillman on 16 December 2015.

^[60] Basten JA was in dissent.

^[61] Stillman [2015] NSWCA 410 [73].

^[62] Commissioner of the Australian Federal Police v Dong Hua International Investments Pty Ltd [2016] VSCA 15 [31].

^[63] See [59] above.

^[64] See [43] above.

^[65] Ground 4.

^[66] See [19] above.

^[67] See [20]-[31] above.

^[68] See [22] above.

^[69] See [24] above.

^[70] See [25] above.

^[71] See [21] above.

^[72] See [26] above.

^[73] See [28] above.

^[74] See [30] above.

^[75] See [25] above.

^[76] See [43] above.

^[77] Kennedy v Shire of Campaspe [2015] VSCA 47 [12].

^[78] The application was made in the matter of Kendirijan v Lepore (No S170 of 2016). This was heard by the High Court on 9 February 2017.

Authorities Cited14

Referred to (14)