Advocates’ Immunity for Pleading Errors

Cappello v Lyons [2023] NSWCA 137 (23 June 2023)

The appellants were plaintiffs and cross-defendants in proceedings in the Equity Division of the Supreme Court against a building company. Those proceedings turned, in part, on the entitlement of the builder to recover an amount claimed under a progress claim issued to the appellants, which they had refused to pay in full.  The Court held it did have such an entitlement.

The entitlement of the builder to issue progress claims arose from cl 15 of the contract between the builder and the appellants. Clause 15.4 required any progress claim to include details of the cost of the building works carried out. Clause 15.5 required any progress claim to be accompanied by such invoices, receipts or other documents as may reasonably be expected to support the claim and evidence the cost of the building works being claimed. At no time in the proceedings in the Equity Division did the appellants assert any failure on the part of the builder to comply with cl 15. The appellants sought to introduce this as an issue in an appeal to the Court of Appeal. The Court refused to allow the new point to be argued, and the appellants’ liability to pay the amount outstanding on the progress claim was not disturbed.

The appellants’ pleading in the proceedings in the Equity Division was drafted by a solicitor. Five months before those proceedings were heard, the solicitor filed a Notice of Ceasing to Act.

The appellants commenced a proceeding against the solicitor in the District Court, claiming damages for professional negligence. The asserted negligence was failure to plead in the proceedings in the Equity Division that the builder, in issuing its progress claims, had breached cl 15 of the contract. The appellants 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 and they would have been entitled to be repaid all monies previously paid pursuant to earlier progress claims.

The Court dismissed the claim.  The appellants appealed to the Court of Appeal. One of the issues was whether the respondent solicitor could rely on a defence of advocate’s immunity.

The Court (Simpson AJA, Meagher JA and Griffiths AJA agreeing), in dismissing the appeal, provided the following concise summary of the application of advocate’s immunity to pleadings and omissions therein.

“Ground 1: “advocate’s immunity”

47. It is convenient, before coming to Mr Cappello’s submissions with respect to ground 1 (which are brief) to outline the relevant legal principles, as stated in the three principal decisions of the High Court referred to above. The ground is, in my opinion, so plainly untenable that I propose to deal with it as briefly as possible.
48. The central principle was identified in D’Orta at [1] as:

“… at common law an advocate cannot be sued by his or her client for negligence in the conduct of a case in court, or in work out of court which leads to a decision affecting the conduct of a case in court.” (emphasis added)

49. The principle is of long standing and derives from English authority: Rondel v Worsley [1969] 1 AC 191; Saif Ali v Sydney Mitchell & Co [1980] AC 198. It was adopted as stating the law in Australia by a narrow majority (Mason CJ, Wilson, Brennan and Dawson JJ, Deane, Toohey and Gaudron JJ dissenting) in Giannarelli.
50. In that case, Mason CJ said that the rationale for the immunity “must rest on considerations of public policy”: at 555. The primary public policy consideration is finality of the resolution of legal disputes. His Honour referred to:

“… the adverse consequences for the administration of justice which would flow from the re-litigation in collateral proceedings for negligence of issues determined in the principal proceedings”.

Notwithstanding that the principle has come to be known as “advocate’s immunity”, Mason CJ made it plain that the protection it gives is afforded, not for the benefit of the advocate, but for the wider and more profound purpose of the protection of the administration of justice in promoting finality in the resolution of legal disputes: at 557. The immunity is that of the ultimate decision in legal proceedings.

51. That necessarily raises the question of the scope of the immunity, something discussed by Mason CJ in Giannarelli. His Honour observed that the public policy considerations underlying the immunity for in-court negligence had no application to liability for work done out of court which is unconnected with work done in court, and added (at 559-60):

“The problem is: where does one draw the dividing line? Is the immunity to end at the courtroom door so that the protection does not extend to preparatory activities such as the drawing and settling of pleadings and the giving of advice on evidence? To limit the immunity in this way would be to confine it to conduct and management of the case in the courtroom, thereby protecting the advocate in respect of his tactical handling of the proceedings. However, it would be artificial in the extreme to draw the line at the courtroom door. Preparation of a case out of court cannot be divorced from presentation in court. The two are inextricably interwoven so that the immunity must extend to work done out of court which leads to a decision affecting the conduct of the case in court. But to take the immunity any further would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity.”

52. His Honour then endorsed a proposition stated in a New Zealand decision (Rees v Sinclair [1974] 1 NZLR 180 at 187) that:

“… the protection exists only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing.”

53. These observations from Giannarelli were adopted in D’Orta, in which the High Court was invited to reconsider its decision in Giannarelli, an invitation the High Court, by majority, refused.
54. The most recent consideration of the scope of the immunity by the High Court was in Attwells, in which a majority of the Court (French CJ, Kiefel, Bell, Gageler and Keane JJ) concluded that it does not extend to negligent advice that leads to settlement of a case by agreement between the parties – settlement by the parties not being a “decision affecting the conduct of a case in court”.
55. The majority considered that:

“the required connection is between the work in question and the manner in which the case is conducted in court.” (at [5])

and

“In short, 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 ….” (at [6])

56. At [37] their Honours held that the scope of the immunity “is confined to conduct of the advocate which contributes to a judicial determination”. At [46] their Honours said:

“Once it is appreciated that the basis of the immunity is the protection of the finality and certainty of judicial determinations, it can be more clearly understood that the ‘intimate connection’ between the advocate’s work and ‘the conduct of the case in court’ must be such that the work affects the way the case is to be conducted so as to affect its outcome by judicial decision. The notion of an ‘intimate connection’ between the work the subject of the claim by the disappointed client and the conduct of the case does not encompass any plausible historical connection between the advocate’s work and the client’s loss; rather, it is concerned only with work by the advocate that bears upon the judge’s determination of the case.”

57. It was no doubt these conclusions that the primary judge had in mind when she held that the pleadings in the Supreme Court proceedings bore upon Ball J’s determination of the case.
58. In his written submissions Mr Cappello acknowledged the principles stated above, and quoted from Attwells, D’Orta and Giannarelli. He then advanced a single argument against the decision of the primary judge. This was:

“Attwells is binding authority for the critical element necessary to invoke advocate’s immunity is that the work must have led to a decision (emphasis added) affecting the conduct of the case in court. In this case there was no decision by the solicitor. The solicitor did not consider clauses 15.4 and 15.5 of the building contract and the non-compliance therewith by the builder. He did not decide not to include it the pleadings. There was no evidence from the solicitor that he had considered and decided not to include it. It follows that advocate’s immunity was not available to the solicitor as a complete defence to the claim against him.”

The first thing to note about these submissions is that they are based on a premise not established in the evidence. As Mr Cappello noted, Mr Lyons did not give evidence, either by affidavit or orally. There was no evidence that he had not given consideration to cll 15.4 and 15.5 of the contract. It is simply speculation to say, as Mr Cappello does, that Mr Lyons did not make a decision not to include cl 15 in the pleadings.

More importantly, perhaps, Mr Cappello appears to misunderstand what was intended by Mason CJ in referring to “a decision affecting the conduct of the case in court”. I do not understand his Honour to be saying that, in the absence of a conscious or articulated decision by the advocate (for example to plead a possible claim or defence), the immunity does not apply. A number of cases have determined that an omission may also attract the immunity: see, for example Keefe v Marks (1989) 16 NSWLR 713; Attard v James Legal Pty Ltd [2010] NSWCA 311 at [2] (Beazley JA), [9] (Giles JA).

The relevant “decisions” are those involved in the conduct of the litigation. The pleading is the fundamental document that underlies all decisions to be made in the conduct of litigation. As the primary judge said, the pleading defines the issues for determination. They are thus “intimately connected” with the conduct of the case in court. They are also foundational to the outcome of the litigation.

It is perfectly plain that the failure by Mr Lyons to plead a breach of cl 15, whether by conscious decision or by omission to consider the consequences of non-compliance, and whatever the outcome might have been had it been pleaded, attracts the immunity discussed in Giannarelli, D’Orta and Attwells. It was “intimately connected” with conduct of the claim brought by the Cappellos, and the cross-claim brought by H&S. It no doubt led to multiple decisions in the conduct of that litigation, and therefore to the final decision by Ball J. The primary judge was correct to uphold Mr Lyons’ defence.”

A link to the case can be found here.