The Victorian Court of Appeal in Spralja v Bullards [2017] VSCA 32 has set aside a decision of a judge of the County Court granting summary dismissal of proceedings brought against a firm of solicitors and two barristers for negligent advice because the judge had applied the common law doctrine of the advocate’s immunity in a way which has since been shown to be in error by the High Court of Australia in Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16; (2016) 331 ALR 1 (“Attwells”).
The allegedly negligent advice given by the lawyers related to the settlement of proceedings for breach of a sale agreement. Although the client denied that he had agreed to the terms of settlement and asserted that they were invalid, the terms of settlement had been relied on by the other party to obtain judgment in the sale agreement proceedings. The client had then brought the negligence proceedings against the lawyers and the lawyers had sought summary dismissal of the proceedings. At the time of the hearing of the summary dismissal application, the High Court had not determined the appeal in Attwells although special leave to appeal had been granted. The judge initially decided to delay delivery of his judgment pending the High Court’s determination but later decided that it was appropriate to determine the application based on the current state of the law of the advocate’s immunity having regard to:
- authority which stated that primary decisions of courts should not be delayed pending the outcome of appellate decisions;
- the ill-health of one of the respondent lawyers; and
- the fact that any error could be corrected on appeal.
The judge ultimately found that the proceedings had no real prospect of success because the lawyers were entitled to the protection of the advocate’s immunity and so ordered summary dismissal of the proceedings.
On appeal, the Court of Appeal said at [46] that the High Court in Attwells had clarified the scope of the doctrine of the advocate’s immunity and indicated at [46]-[49] that the following principles could be derived from the plurality reasons in Attwells:
- The foundation of the immunity related to the exercise of judicial power. The protection provided by the immunity arose out of the connection between the advocate’s work and the judicial determination of a controversy for which a court was responsible. It did not extend to the compromise or settlement of proceedings, even where the settlement was recorded in consent orders by a court, because the substantive resolution of the dispute did not involve the exercise of judicial power by a court.
- The intimate connection required to attract the immunity was a functional connection between the advocate’s work and the judge’s decision. While the nexus identified in Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 and D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 whereby protection was provided to legal work connected with in-court conduct remained the authoritative test, the test was not satisfied where the advocate’s work led to an agreement between parties to litigation to settle their dispute.
- A consent order did not have the effect of bringing the actions undertaken as part of settlement negotiations within the scope of the immunity because the consent order had nothing to do with the substantive content of the rights and obligations established by the settlement agreement. This was because the substantive content of those rights and obligations was decided by the parties without any determination by the court. While the consent order may have facilitated the enforcement of the compromise, it was the agreement of the parties that settled its terms.
The Court of Appeal then said at [50] that the County Court judge did not have the benefit of the clarification given to the scope of the advocate’s immunity by the High Court in Attwells at the time of the summary dismissal application and that, as a result, the scope of the immunity had been treated as extending to legal work carried out in the course of advising upon, and reaching, the settlement of the sale agreement proceedings on the assumption that work relating to a settlement had, without more, a sufficient nexus to the conduct of a case in court. The Court of Appeal went on to say:
“This approach was the foundation of [the County Court judge’s] 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, [the County Court judge] was in error in his appreciation of the breadth, and foundation, of the immunity.”
The Court of Appeal noted that the immunity, being a common law doctrine, was subject to judicial clarification and reformulation over time even if the limits of the immunity had not always been clearly understood in the manner that now prevailed and, accordingly, concluded at [51] that, when the law as revealed by Attwells was applied, it could not be said that the negligence proceedings against the lawyers had no real prospect of success.
This was sufficient for the disposition of the appeal but it had also been claimed that, given that special leave had been granted in Attwells, the County Court judge should have delayed the delivery of his judgment until Attwells had been decided or otherwise should have adjourned the proceedings. However, the Court of Appeal considered that, in the circumstances of the case, the judge was not under an obligation to take either of these courses of action (see [56]-[63]).
The Court of Appeal noted that an application had been made to the High Court to reopen Attwells in Kendirjian v Lepore [2017] HCA Trans 17 and that judgment had been reserved in that matter but considered that it was appropriate to proceed to deliver its judgment in the case before it (see [71]).
For a detailed summary of Attwells, see K Ottesen, “Attwells v Jackson Lalic Lawyers Pty Limited – High Court retains advocate’s immunity from suit but holds that out of court settlements are outside its scope”, 18 May 2016.
