Advocates' Immunity In Mediation Proceedings: Stillman v Rusbourne [2015] NSWCA 410
Monday 11 January 2016 @ 12.38 p.m. | Legal Research
The New South Wales Court of Appeal has decided that advice given during and leading up to a court-appointed mediation process is protected by the “advocates’ immunity” principle. The result was a 2:1 majority decision, with Gleeson and Simpson JJA writing separate and concurring judgments, with Basten JA dissenting.
Facts
The applicant in the case, Mr Stillman, retained the respondents to act for him and a company known as Goldfields Crushing between July 2006 and August 2007. Mr Stillman and his company were being sued in the Supreme Court by a company called Coast to Country Crushing and Screening Pty Ltd (“CCCS”), in a dispute relating to rental payments of equipment owned by CCCS and used by Goldfields Crushing. The applicant intended to defend the case by arguing that the agreement between the parties was a joint venture, rather than a lease.
Before the trial had commenced, the parties were referred to a court-appointed mediator. The mediation took place on 11 July 2007 and Mr Stillman was represented by two solicitors from the respondents’ partnership. After the mediation, and following advice from the respondents, Mr Stillman accepted an offer of settlement which was generally unfavourable to Mr Stillman and Goldfields Crushing.
The applicants claimed that the respondents were negligent in their advice and representation:
“The pleading alleged advice given by the respondents between about July 2006 and July 2007 to the effect that the applicant and his company had a sound basis in fact and law to defend the proceedings…
The pleading alleged that the respondents’ advice changed in the course of the mediation and the applicant was pressured to accept terms which were “excessively disadvantageous”. [Basten JA at 24-25]”
The respondents applied to have the proceedings dismissed on the basis that “advocates’ immunity” was a complete defence to the applicant’s claims. Justice Davies upheld the respondent’s application at first instance (Stillman v Rusbourne [2014] NSWSC 730).
Decision
The decision revolved largely around the discussion of the precedents in Giannarelli v Wraith [1988] HCA 52; 165 CLR 543, D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 and Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335 ("Jackson Lalic").
Simpson JA found that “the circumstances in Jackson Lalic [where advice concerning settlement was given during the final hearing] are indistinguishable from the present” [at 71], and considered that there was no reason to depart from applying the same principle in this case.
Gleeson JA disagreed with this assessment, noting that:
“The difference is that in Jackson Lalic there was a temporal connection between the work involved in advising on a settlement and the actual trial itself. The advice was given during the luncheon adjournment on the first day of the hearing and on the evening of that day.” [at 52]
However, he agreed with Simpson JA’s decision, concluding that:
“In the present case, the work by the respondent lawyers fell within the recognised categories of work done out of court affecting the conduct of the case in court...
This is what ultimately occurred. The advice led to the case being settled. That was a sufficient connection between the work out of court and the conduct of the case in court to attract the advocates’ immunity.” [at 60]
In his dissent, Basten JA highlighted the special nature of mediation proceedings, saying:
“Taken in isolation, there would be no reason to deny a party who was negligently advised in the course of a mediation a right to bring proceedings against his or her lawyers…
The only reason to depart from this analysis is that the mediation has, in one sense, had an effect on the conduct of outstanding litigation, namely that it has put an end to the litigation without a trial and determination by a judge (or a judge and jury).” [at 30-31]. He thus felt that this case should fall outside the principle of “advocates’ immunity”.
However, both majority judges suggested the High Court may have a role to play in clarifying the application of the principle. In his judgment, Simpson JA noted that the High Court has granted special leave to the respondent to appeal from the Jackson Lalic case. Gleeson JA concluded his case by suggesting:
“If the rule concerning advocates’ immunity for out of court work affecting the conduct of the case in court is to be restricted only to cases where there has been a final hearing on the merits, then that is a matter which should be left to the High Court to determine.” [at 61]
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Sources:
Stillman v Rusbourne [2015] NSWCA 410
