Attwells v Jackson Lalic Lawyers [2016] HCA 16 – High Court rules on the advocate’s immunity from suit

On 4 May 2016 the High Court handed down its decision on whether to extend the advocate’s immunity from suit to situations where negligent advice is given which leads to the settlement of a case by agreement between parties and consent orders. This case summary has been written for junior lawyers working in litigation and law students studying Ethics and the Legal Profession.

The advocate’s immunity from suit

The two High Court precedents on advocate’s immunity are:

1.       Giannarelli v Wraith (1988) 165 CLR 543

The advocate’s immunity was said to extend beyond conduct of a case in court to “work done out of court which leads to a decision affecting the conduct of the case in court” (at 560). Mason CJ described two tests for determining whether work outside of court will attract the immunity:

a.       “work done out of court which leads to a decision effecting the conduct of the case in court” (at 559)

b.      “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” (adopted from the New Zealand case of Rees v Sinclair [1974] 1 NZLR 180) (the “intimately connected” test).

In D’Orta the High Court held that these two tests are essentially the same.

2.       D’Orta-Ekenaike v Victorian Legal Aid (2005) 223 CLR 1 (applying Giannarelli)

In D’Orta, the High Court confirmed there are two categories where the immunity arises (inside of court and outside of court) and approved Mason CJ’s scope of the immunity for work occurring outside of court. The High Court held the immunity applied in the facts before it where an accused was given negligence advice to plead guilty, as the acceptance of this advice to plead guilty effected the determination of the case by the court as the court cannot conclude its function until a conviction is recorded, and the decision about a plea of guilty is intimately connected to the hearing of a criminal case as it is a decision made preliminary to the hearing of a charge which effects the conduct to the matter before the court.

Facts in Attwells v Jackson Lalic Lawyers

Gregory Attwells was a guarantor of payment of liabilities of a company to a bank. The company defaulted on the payments and the bank commenced proceedings against both the company and the guarantors (see Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335). The guarantors were represented by Jackson Lalic Lawyers in the proceedings. Proceedings settled (on what turned out to be negligent advice from Jackson Lalic Lawyers). The settlement was reflected in consent orders. The negligent advice from Jackson Lalic Lawyers included that the guarantors would be liable to pay the bank $3,399,347, when the guaranteed amount was $1,856.122, and the guarantors were not liable to pay more than this amount. The guarantors signed the consent orders based on this advice. The guarantors commenced negligence proceedings against Jackson Lalic Lawyers in the NSW Supreme Court, where Smchmidt J ordered that the question of whether Jackson Lalic Lawyers is immune from suit be decided separately from the other issues in the negligence proceedings.   

Legal question

Does the advocate’s immunity extend to negligent advice which leads to the settlement of a case by agreement between the parties?

Court of Appeal - Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335

The Court of Appeal held that Jackson Lalic Lawyers’ advice was within the scope of the immunity as the advice fell into the category of work done out of court affecting the conduct off the case in court, that the advice was intimately connected with the conduct of the guarantee proceedings.

High Court

The High Court held 5:2 that the immunity does not extend to negligent advice that leads to a disadvantageous settlement, even where the settlement is made into consent orders. Nettle J and Gaudron J dissented in separate judgments.

French CJ, Kiefel, Bell, Gageler and Keane JJ (the majority judgment):

a.       Intimate connection – look to the policy reason behind the immunity

The High Court majority began its analysis by identifying the policy reason behind the immunity. The rationale behind the advocate’s immunity is that the community at large has a vital interest in the final resolution of decisions by judicial determination, and that after a judicial determination has been made, it should not be open to collateral attacks seeking to demonstrate that a judicial determination is wrong ([34]). The immunity exists to protect the public interest in the finality of judicial decisions ([35]). This rationale is why the scope of the immunity is limited to conduct of the advocate which contributes to a judicial determination ([37]). The Law Society of NSW (as an intervener in proceedings) submitted that the immunity should be extended otherwise lawyers will not encourage their clients to settle their claims, as they will not have immunity from protection ([52]). The High Court rejected this argument, as it does not accord with the primary policy reason for the immunity.  Extending the immunity to advice which leads to the settlement of litigation takes the immunity away from its primary rationale, which is to protect the exercise of judicial power from collateral attack. 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.

b.      Historical connection alone is not sufficient

The joint judgment discussed what would constitute an “intimate connection”, distinguishing “merely historical connections” from “functional connections” ([49]). The Law Society of NSW submitted that negligent advice not to settle is intimately connected with an ensuing judicial decision of the court so as to attract the immunity. The High Court rejected this “historical connection”, stating it is not sufficient that one event precedes another event to create an “intimate connection”. The “intimate connection” discussed in Giannarelli and D’Orta is a “functional connection” which is the connection required by the public policy reason for the immunity.

c.       Consent orders

The settlement was embodied in consent orders, and the respondent argued that this involvement of the court was sufficient to constitute an “intimate connection”. The High Court rejected this argument, as the substantive content of the rights and obligations in the consent orders were determined by the parties without any determination by the court. The terms of the settlement agreement “were not, in any way, the result of the exercise of judicial power”. The High Court left the question open as to whether it would be different in situations where “the making of the order itself requires the resolution of issues by the exercise of judicial power” such as where representative proceedings are settled or where proceedings on behalf of a person under legal incapacity are to be compromised.

The dissenters

Gordon J held that the advocates immunity does extend to negligent advice leading to settlement where the agreement is reflected in consent orders. Gordon J focused on a different aspect of the plurality’s judgment in D’Orta, being that the immunity plays a part in a series of rules which are “designed to achieve finality in the quelling of disputes by the exercise of judicial power” ([100]), equating the final quelling of disputes with “work intimately connected with” work in the court, and proceeded to focus on the final quelling of disputes rather than the intimate connection test the plurality focused on. While the majority distinguished Attwells v Jackson Lalic Lawyers from D’Orta, Gordon J argued that both cases involved a final quelling of the outcome, in that both admissions were given legal effect by authority of the court – in one case by entry of conviction, and in the other by entry of verdict and a judgment. Gordon J was careful to analyse the orders made by the court. Orders 1-9 constituted orders of the court recording a verdict and judgment made, whereas paragraphs 10 onwards in the orders merely noted the agreement made between the parties. The verdict and final judgment contained in Orders 1-9 constituted a final quelling of a controversy by exercise of judicial power which attracts the advocate’s immunity from suit.

Nettle J agreed with Gordon J’s reasons for dissenting, focusing on the final quelling of a dispute by judicial power. Even where the parties are agreed on the orders which should be made for the final determination of their rights and liabilities, it remains for the court to be satisfied that it is appropriate to do so to order, which involved judicial power and attracts the advocate’s immunity. 

An open letter to supervisors of junior lawyers

I have been blessed with great supervisors so far in my (short) legal career. Some of my friends have not been so lucky. This blog post is a combination of my thoughts and my friends’ thoughts on what makes a good supervisor.

Dear supervisors of junior lawyers,

If you would like to be a fantastic supervisor that we remember for the rest of our career for the right reasons please note the following:

1.       Provide as much feedback as possible

Whenever we get direct, contemporaneous feedback, we can quickly adapt and learn for next time. Where you accept mediocre work and choose not to give feedback, we will not have a chance to improve. Do not wait for set quarterly or six monthly reviews, please tell us straight away each time you review a piece of work. Let us know if we have the structure of an advice wrong, if we have not quite understood a legal concept, if the wording in a clause we have drafted is archaic, if our email was drafted in the wrong tone, or if our attempt at plain english drafting was not correct. If you don’t tell us, we will forever be wondering in our heads, and this can lead to insecurity and a lack of confidence. Feedback works both ways. We develop as junior lawyers and you get the benefit of a more capable lawyer. We won’t be offended, or start crying, or think you are a nasty person. We just want to learn and do a better job next time.

2.       Give us encouragement and positive affirmations when we do a good job

We may come across as confident, but underneath the surface most of us are trying desperately to stay afloat and adapt to do legal work which is predominantly new to us. When we do something right please let us know because it will help improve our confidence.

3.       Value legal training and other types of professional development

Some supervisors view Continued Professional Development obligations as a necessary evil. Other supervisors view it as an opportunity to fill skill gaps. A good supervisor will take the second approach and make sure you are attending the cutting edge legal seminars and training in your area of speciality. Good supervisors also understand the importance of professional development including having a mentor who is not your boss and having professional contact with junior lawyers working in a similar field. Attending networking events should be encouraged and supported, even if it means leaving work at 5pm that day or having a long lunch to make it to a networking event. Overall, we will be happier and more productive at work where we feel we belong in the legal world and have contacts to use.

4.       We are capable of so much more than you think

Yes we can use the photocopier, do legal research, draft basic contract clauses and attend court for return of subpoena matters. However, we are capable of so much more. When the senior associate goes on annual leave, don’t be afraid to trust us with difficult work, even in areas of law we do not have much experience in. As recent law graduates, we specialise in learning new areas of law quickly and accurately (aka cramming before a law exam). Especially in situations where a niche advice is required, let us have a go before you give the work to a specialist barrister. Even where we still have to get expert legal advice, our preliminary advice can be included in the brief, save the barrister time and in turn save your client money.

5.       Share things about yourself so we can see that you are human

Please share anecdotes about your weekend/your family/your kids/your golfing trip. You might not think we are interested, but we are. We are desperate for information about you that makes you relatable (and slightly less scary).

6.       Let us know when to go home

Sometimes it is difficult to know when it is ok to unshackle ourselves from our desks and go home for the day, especially when we work in litigation or transactional areas of law where our finishing time will vary greatly from day to day. When you give us a lengthy task at 6pm, please tell us whether it is urgent or not, which will give us a clear message as to whether to leave or stay at work another 3 hours. I know we should have the courage to ask, but sometimes it seems easier and safer to stay at work and not ask the question of urgency, as we don’t want to be seen as lazy.

7.       Try and make it easier for us when we are asking for something difficult

Some junior lawyers find it extremely awkward asking for annual leave, sick leave, special working circumstances, or pay rises. If you sense this is the reason we are talking for you, please smile and encourage the question. Usually we have been rehearsing the conversation in our head for weeks and it has taken this long to gather the courage to actually have the conversation.  

8.       Keep your office door open (at least sometimes)

Although we can work autonomously for long periods of time, we will need access to you at least once a day to touch base and make sure we are on the correct path. Please make sure you keep your door open for at least part of the day so this is possible. Even better, come and talk to us at our desk where we are more comfortable and where we have all the work on our computer to show you.

9.       Understand we are not earning much money

Given the economic climate, quite a few unadmitted law graduates are being paid award rate, which under the Legal Services Award 2010 for a full time Law Graduate Level 5 is currently $882.80 a week or $23.23 an hour. Living off this much in Sydney or Melbourne is doable, but does not leave us with much of a financial cushion. When you ask us to pay for our practising certificates and claim reimbursement which can take a month, it can put us in tricky financial situations. Similarly, when you ask us to go and buy a colleague a present, and then collect money from other colleagues to reimburse ourselves, we are ordinarily always out of pocket (there is always one team member that does not pay). Please make sure this does not happen. The lowest earning member of your team should not be the one forking out. Most of the time supervisors are either not aware how little their junior lawyers are paid or are not aware their junior lawyers are out of pocket. Make sure this doesn’t happen.

10.    Care about our wellbeing (or at least pretend)

If twelve months have passed since we took annual leave, have a conversation with us. If we are sick, and there is no urgent work, send us home. Even if there is urgent work, send us home to work from home. Remind us of the workplace wellbeing services and encourage use of subsidised work yoga and meditation sessions. We actually would like to use these services, but are waiting for the all clear from you. Imagine how productive we will be once we get back from a mind clearing meditation session.

Yours sincerely,

Junior lawyers  

Jurisdictional facts – what are they and why do we care?

Jurisdictional fact review is taught quickly at law school and soon forgotten altogether as students focus on more common grounds for judicial review. If you find yourself working in administrative law as a graduate, you may need to brush up on your knowledge. Read this blog post then go forth and impress your team with your understanding of a niche but important area of law.

Why do we care about jurisdictional facts?

As a rule of thumb, a factual error is not a ground for review of a decision. An exception to this rule exists for jurisdictional facts. Where an error has been made about a jurisdictional fact, this is a ground for review of a decision at common law. Jurisdictional fact review is unique in that the reviewing court can receive fresh evidence. For other grounds of review, the reviewing court is stuck with findings of facts made by the decision maker, as questions of fact are seen as belonging to the merits, and the task of a court is to inquire into the legality of the decision (this is known as the merits/legality distinction). In jurisdictional fact review, the evidence before and reasoning of the administrator in fact finding can be reviewed by the court and the existence of facts can be determined afresh. Jurisdictional fact review is an important ground of review to remember because of this opportunity it gives the review court to go beyond the merits/legality distinction.

How to identify a jurisdictional fact

Broadly speaking, a jurisdictional fact is a factual circumstance that must exist prior to a decision being made. A jurisdictional fact might be a certain event or requirement that must occur before a decision is made.  In Timbarra (see key cases below for summary) Spigelman CJ stated there are two factors to consider when determining whether a fact is a jurisdictional fact:

1.       Objectivity: Did parliament intend that the fact must actually exist or be objectively determined as opposed to the decision maker just been satisfied in something? If the act refers in objective terms to the belief, satisfaction would indicate subjectivity rather than objectivity. Note that when Spigelman CJ refers to parliament’s intention he is referring to the intention as evident from the words parliament chose to use in the text of the legislation. While the Explanatory Memorandum and other aids can be taken into account, normal principles of statutory interpretation apply and the starting point is always with the text of the statute.

2.       Essentiality: Did parliament intend that the absence or presence of the fact will invalidate the action. One important factor which is often determinative is whether the fact is preliminary to the exercise of power or arise in the course of exercising the power, if the fact is preliminary to the exercise of the power is not likely to be essential.

A jurisdictional fact will form the basis for judicial review of the decision if it does not exist or has been made in error.

Hypothetical examples:

1.       If legislation states a tribunal can only exercise its powers when sitting on a Wednesday, the fact that it is a Wednesday may be a jurisdictional fact;

2.       If legislation states a person must be convicted of a crime before a decision to revoke a visa can be exercised, the fact a person has been convicted of a crime may be a jurisdictional fact.

Do not confuse a jurisdictional fact with:

1.       A jurisdictional requirement

A jurisdictional requirement is a precondition that must be met before a valid decision can be made. Where a jurisdictional requirement is not met it may cause a jurisdictional error which is a ground for review. If you want to revise jurisdictional requirements the High Court’s discussion of jurisdictional error in Craig v State of South Australia (1995) 184 CLR 163 (Craig) is a must read.

2.       A jurisdictional opinion

Do not confuse a jurisdictional fact with a jurisdictional opinion (see Spigelman CJ’s objectivity/subjectivity distinction above). As Aronson, Dyer and Groves put it in Judicial Review of Administrative Action (4^th ed) a jurisdictional fact “is purely factual”. Note though there are differing opinions on how “purely factual” an opinion must be (see Minister for Immigration and Ethnic Affairs v Eshetu (1999) 197 CLR 611 per Gummow J). If you do not understand the difference between a jurisdictional fact and a jurisdictional opinion, you may want to go right back to basics to review the difference between a fact and an opinion and then go from there. Where you have a jurisdictional opinion, not a jurisdictional fact, the normal principles of reviewing a subjective power will apply and the court cannot accept evidence and decide whether the relevant subjective criterion was met.

Key cases

Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 (Enfield)

Facts:

The case of Enfield concerned the expansion of waste treatment plant. The developers had applied to the Development Assessment Commission (DAC) for approval of their expansion plan, which the Local Council strongly opposed. Where a development proposal could be classified as “special industry”, the development application required the consent of both local Minister and Council. The Local Council argued that the extension of the waste treatment plant was “special industry” as it would create smells and allow smells to escape to nearby land. The DAC considered the evidence about smells, formed the view the development was not a “special industry” and approved the application.

Legal issue:

Whether the “special industry” requirement was a jurisdictional fact or an opinion.

High Court:

Found that the characterisation of a proposed development as a “special industry” is a jurisdictional fact, as the legislative regime did not frame the requirement in terms of an opinion and the question of whether a development was a “special industry” played a pivotal role in the development approval scheme, as it was a trigger for public participation and other requirements. The “special industry” requirement was framed objectively as something to be objectively determined.

Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 5 (Timbarra)

Facts: Ross Mining submitted an application to extend one of its goldmines. The legislation required a Species Impact Assessment (SIA) to be submitted with the application where the development was “likely to significantly affect threatened species”. Ross Mining did not submit a SIA, as it argued the development was not likely to significantly affect threatened species. Timbarra Protection Coalition, a lobby group, argued the mining development was likely to significantly affect a number of threatened species including frogs, bats and owls, therefore no “application” had been made and the council could not approve the application as a jurisdictional fact did not exist.

Legal issue: Whether the requirement to submit an SIA where the development was “likely to significantly affect endangered species” was a jurisdictional fact and whether fresh evidence as to the fact could be considered by the reviewing court.

First instance – NSW Land and Environment Court, Justice Tolbert:

Held there was no jurisdictional fact and no fresh evidence could be heard.

NSW Court of Appeal:

Found there was a jurisdictional fact and fresh evidence could be heard by the reviewing court. The legislation was expressed such that the SIA had a pivotal role in the statutory scheme as it ensured detailed information was available to decision makers. The submission of an SIA was necessary before consent was granted or not. Weighing against these factors was that reasonable minds could differ about whether a development would “significantly affect” endangered species. However, the Court of Appeal found the requirement was sufficiently objective and was therefore a jurisdictional fact. The matter was remitted back to the Land and Environment Court to hear fresh evidence about the significant affect of the development on endangered species.

Good luck identifying jurisdictional facts. Don’t be disheartened if you do not understand jurisdictional fact review or if you get confused between different grounds of review. I certainly did not understand the concept five years ago when I first encountered administrative law as a law student. Keep at it.