New South Wales confirms advocate’s immunity applies to pleadings

In the decision of Capello v Lyons [2023] NSWCA 137 the New South Wales Court of Appeal undertook a consideration of the extent to which advocate’s immunity applies to work done outside of court, confirming it extends to the preparation of pleadings.

Background

The defendant law firm represented the plaintiffs in proceedings they commenced against a builder whom they had contracted to perform additions and alterations to their residential property.

The underlying proceeding

In the underlying Supreme Court proceeding, the plaintiffs alleged that there were defects in the builder’s work and that the work had not been carried out within the contracted timeframe of 26 weeks. The plaintiffs also alleged the builder had improperly issued invoices to it for work associated with rectifying defects, unnecessary work and for margins to which the builder was not entitled. The damages sought by the plaintiffs were referrable to diminution in value of the property, and alleged overpayments.

The builder, who had terminated the building contract following one of its invoices not having been paid commenced a cross-claim seeking damages referrable to the unpaid fees.

The defendant solicitor was retained by the plaintiffs in the underlying proceedings between January 2019 and February 2020, during which time an amended list statement outlining the plaintiffs’ allegations against the builder and a response to the builder’s list statement in respect of the cross-claim were filed.

The defendant solicitor terminated its retainer prior to trial following an exchange of emails in which the plaintiffs resisted the defendant solicitor’s attempts to arrange a conference with the plaintiffs and counsel briefed in preparation for the hearing.

The plaintiffs were self-represented at trial. The builder’s cross claim was successful and judgment in the amount of the unpaid invoice was entered against the plaintiffs. The plaintiffs subsequently filed an appeal to the New South Wales Court of Appeal, in relation to which they were legally represented by separate solicitors.  

On appeal, the plaintiffs sought to introduce a new argument regarding the validity of the builder’s unpaid invoice based on the builder’s failure to comply with certain provisions of the building contract. The Court of Appeal refused to allow that argument to be introduced on appeal, but reduced the judgment amount payable by the plaintiffs to the builder on another basis.

The professional negligence proceedings

The plaintiffs subsequently commenced District Court of New South Wales proceedings against the defendant solicitor, alleging he negligently failed to plead that the builder had breached provisions of the building contract (being the argument disallowed on appeal).

The plaintiffs asserted that, had those breaches been pleaded, they would not have been liable to the builder for non-payment of the builder’s final progress claim. The plaintiffs also asserted that they would have been entitled to be repaid all monies that they had previously paid pursuant to earlier progress claims.

The defendant solicitor successfully defended that claim at first instance, on the basis of advocate’s immunity.

The primary judge concluded that, in applying the principles in D'Orta-Ekenaike v Victoria Legal Aid¹ and Attwells v Jackson Lalic Lawyers Pty Limited² the preparation of the list statement and response to the builder’s list statement fell within the scope of advocate’s immunity as that work “serves to define the issues that require determination and necessarily affects the manner in which the case is to be conducted”.

On that basis, the primary judge held the preparation of those pleadings was work which bore upon the ultimate determination of the plaintiffs’ claim and the builder’s cross claim notwithstanding that it was work done outside of court, because it led to a decision which affected the conduct of the case in court.

The plaintiffs’ appeal of that primary judgment is the subject of this Court of Appeal decision.

Advocate’s immunity

At common law, barristers and solicitors are immune from liability for negligence in relation to the conduct of a case in court and work undertaken out of court. For the immunity to apply to work undertaken or advice provided out of court, the work or advice in question must be ‘intimately connected’ with the conduct of a case in court, that is:

‘where the particular work is so intimately connected with the conduct of the case in Court that it can fairly be said to be a preliminary decision affecting the way that case is to be conducted when it comes to a hearing.’³

Decision of the Court of Appeal

The Court of Appeal upheld the decision of the trial judge in finding that advocate’s immunity provided a complete defence to the plaintiffs’ claim.  It found that it was “perfectly plain” that any negligent omission by the solicitor to plead a breach of the building contract attracted advocate’s immunity on the basis that a pleading in a litigated matter:

1. Is the fundamental document that underlies all decisions to be made in the conduct of the litigation;
    
2. Therefore, defines the issues for determination and is therefore intimately connected with the conduct of the case in court and fundamental to the outcome of the litigation.

The Court of Appeal found it was immaterial that the asserted breach of duty by the solicitor was an omission to include a matter in the pleading, as opposed to a conscious or articulated decision not to.

Comments

As the High Court of Australia continues to uphold advocate’s immunity in Australia, it remains an effective basis for solicitors and barrister to defend negligence claims against them in certain circumstances. 

The Court of Appeal’s decision is unsurprising and affirms the reasoning of the High Court in D’Orta-Ekenaike v Victoria Legal Aid, Giannarelli v Wraith and Attwells v Jackson Lalic Lawyers Pty Ltd.

Conduct of this nature has always been considered to fall within the immunity. In Keefe v Marks (1989) 16 NSWLR 713 at 718, Gleeson CJ identified the following types of out of court work that are intimately connected with the conduct of the case in court:

“… interviewing the plaintiff and any other potential witnesses, giving advice and making decisions about what witnesses to call and not to call, working up any necessary legal arguments, giving consideration to the adequacy of the pleadings and, if appropriate, causing any necessary steps to be undertaken to have the pleadings amended.”

The effect of an argument attacking a pleading after a judgment has been delivered is that, if the case had been presented properly, a different result would have been reached.  That is, that the solicitor’s failure to properly plead the claim or defence brought about a decision of the court that would otherwise have been different. The court’s decision is, essentially, reopened by the plaintiff’s claim.

As such, at their core, claims framed in this manner are considered to be a collateral attack on the integrity of the trial process and the decisions made throughout that process. They are therefore likely to enliven the immunity.

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