Supreme Court New South Wales

• Medium Neutral Citation: Moss v Eagleston [2014] NSWSC 6
• Hearing dates: 2, 3 and 4 April 2013; further submissions closed 30 January 2014
• Decision date: 04 March 2014
• Before: McCallum J

Decision

Proceedings dismissed

• Catchwords: TORTS - professional negligence - legal profession - where employed solicitor privately agreed to draft statement of claim after his employer's retainer had been terminated - advocate's immunity - whether available where not expressly raised as a defence - scope of solicitor's duty of care in drafting statement of claim - whether informed by agreement to provide services on a pro bono basis - whether causes of action in defamation and unconscionable or misleading or deceptive conduct ought to have been included in the pleading - whether solicitor undertook to represent plaintiff at the hearing of the pleaded claim - whether plaintiff lost chance of succeeding on pleaded claim - whether plaintiff lost chance of succeeding on causes of action omitted from pleading - value of any lost chance
• Legislation Cited: Defamation Act 1974; Defamation Act 2005; Limitation Act 1969
• Cases Cited: D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12; 223 CLR 1; Donnellan v Woodland [2012] NSWCA 433; Fleeton v Fitzgerald (1998) 9 BPR 16,715; Hawkins v Clayton [1988] HCA 15; 164 CLR 539; Heenan v Di Sisto [2008] NSWCA 25; Houda v State of New South Wales [2012] NSWSC 1036; Moss v Eaglestone [2011] NSWCA 404; Ritson v Gay & Lesbian Community Publishing Limited [2012] NSWSC 483; Watson v Foxman (1995) 49 NSWLR 315; Waimond v Byrne (1989) 18 NSWLR 642; Woolcock St Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515
• Category: Principal judgment
• Parties: William Moss (plaintiff); Mark Eagleston (defendant)
• Representation: G Curtin SC (counsel for defendant); Solicitors: Colin Biggers & Paisley (defendant)
• File Number(s): 2009/293847
• Publication restriction: None

Judgment

1 HER HONOUR: This is an action for damages for professional negligence brought by Mr William Moss (also known as William Miller) against his former solicitor, Mr Mark Eagleston.

2 In July 2005, Mr Moss provided information to a journalist from The Daily Telegraph in respect of the notorious case of Schapelle Corby, who spent many years in prison and remains on parole in Bali for drug offences after a quantity of marijuana was found in her luggage upon her arrival from Australia. Mr Moss considered that his information established her innocence of any offence. He maintains that he provided the information to the journalist only after the newspaper had agreed to pay him the sum of $250,000 in the event that the story was published. He further maintains that, in breach of that agreement, the newspaper published two articles making use of the information but refused to pay him.

3 Mr Moss approached the law firm, Reimer Winter Williamson, in February 2007 with a view to bringing legal proceedings against Nationwide News Pty Ltd, the publisher of The Daily Telegraph, in respect of those events. Mr Eagleston was an employee of Reimer Winter Williamson. Mr Moss's matter was allocated to him. At that stage, Mr Eagleston had been admitted as a solicitor for only three months and had worked mainly in debt recovery.

4 Mr Eagleston sent a letter of demand to Nationwide News. Nationwide News declined to capitulate to that demand. Mr Moss could not afford to retain the firm to provide any further legal services. Unbeknownst to his employers, Mr Eagleston then agreed to draft a statement of claim for Mr Moss. The precise terms on which he agreed to do so are in dispute. The statement of claim pleaded a cause of action only in contract. It was filed by Mr Moss in the District Court. He ran the case himself and was unsuccessful.

5 Mr Moss alleges that Mr Eagleston negligently failed to advise him that the two articles published in the Daily Telegraph were defamatory of him; failed to advise him of the existence of a judicial discretion to extend the time within which he could bring an action in defamation; failed to advise him that the action in defamation would have a reasonable prospect of success and could be included in the claim in contract and failed to include a claim in defamation in the statement of claim he drafted (amended statement of claim filed 8 February 2012).

6 In a separate document (incorporated in the pleading by leave), Mr Moss further alleges that Mr Eagleston negligently failed to include in the pleading claims against Nationwide News for unconscionable conduct and misleading or deceptive conduct (on the basis that the journalist allegedly made the promise to pay Mr Moss having no intention of doing so). Finally, Mr Moss alleges that Mr Eagleston agreed to appear for him in the proceedings in the District Court and that, had Mr Eagleston appeared as promised, Mr Moss would not have been unsuccessful in those proceedings.

7 Mr Moss claims damages for the loss of the opportunity to bring actions in defamation, unconscionable conduct and misleading or deceptive conduct and for the loss of the opportunity of being successful in the action for breach of contract prosecuted in the District Court.

8 Mr Eagleston denies that there was any retainer between him and Mr Moss beyond the retainer to write the letter of demand. He denies that there arose any duty of care to advise Mr Moss or in drafting the statement of claim, which Mr Eagleston alleges was undertaken on a pro bono basis. If there was any further retainer or duty of care, he denies that there was any breach of duty or any damage caused by any such breach.

Summary of conclusions

9 As Mr Moss is unrepresented, it is appropriate at the outset to explain the conclusions stated in this decision. I have concluded that Mr Moss's claim must be dismissed. The reason for that conclusion is that I am not persuaded that Mr Eagleston was under a duty to do anything more than to draft a pleading on the strength of the instructions recorded in his letter to Mr Moss dated 6 February 2007. That letter referred only to a potential claim in contract. On that basis, I am not satisfied that Mr Eagleston fell under a duty of care to give advice in respect of the claim in defamation or to include defamation, unconscionable conduct or misleading or deceptive conduct in the draft statement of claim.

10 As to the complaint that Mr Eggleston withdrew from the case and did not appear at the final hearing, I cannot determine with any confidence whether or not he agreed to do so. However, I am satisfied that, even if an agreement was reached to that effect, Mr Eggleston was entitled to withdraw from it and had done so well before the hearing date. On that basis, that claim also fails.

11 In case those conclusions are wrong, I have proceeded to determine the other issues in the case. I have taken that course because I am obliged to do so, in case there is an appeal against my decision. My determination of the other issues is in some instances favourable to Mr Moss but that does not mean that he has won this case. He has lost, because he has not succeeded on the issues referred to in the two preceding paragraphs.

A potential threshold issue raised too late

12 At the conclusion of the hearing Mr Curtin SC, who appears for Mr Eagleston, submitted that, even if there was a breach of duty in drafting the statement of claim, Mr Eagleston's conduct was protected by advocate's immunity. The submission was based upon the principles considered by the High Court in D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12; 223 CLR 1. Mr Curtin relied upon the summary of those principles in the decision of the Court of Appeal in Donnellan v Woodland [2012] NSWCA 433.

13 In Donnellan, the Court of Appeal appears to have been divided as to whether an issue as to advocate's immunity must be determined prior to any consideration of the other issues raised in a professional negligence claim. Beazley JA (as her Honour then was) held that there was no single correct approach, the proper approach depending on whether the issue can be determined on the pleadings. Her Honour said (at [9]):

For myself, I am not satisfied that there is a single correct approach. Rather, it will depend upon the circumstances of the particular case. If the pleadings on their face alleged negligence in the conduct of litigation falling into one of the three categories of consequence that flow from a practitioner's negligence: see D'Orta-Ekenaike at [70], discussed below at [166], it may be possible that the immunity question can be determined on the basis of the conduct alleged in the pleadings. There is a question, in any event, as to the extent of the reach of the immunity. As Basten JA, at [11], observed in Bott v Carter, "the immunity does not extend to all activities undertaken by legal practitioners, even in relation to disputes which may give rise to litigation". However, not every case will be so clear cut.

14 Her Honour was not satisfied that the immunity question could have been resolved on the pleadings in that case.

15 Basten JA held that the approach adopted by the trial judge (of determining the immunity issue only after the hearing of the merits) was erroneous (at [259] to [261]). His Honour said (at [260], emphasis added):

If the defence is available, that must be ascertained from the pleadings and the potential scope of the proceedings so revealed. It is not to be assessed and determined only after the hearing of the merits, with its potential to diminish confidence in the proper administration of justice.

16 Barrett JA, after expressing his agreement that the trial judge had erred in concluding that immunity did not apply, said (at [282], emphasis added):

Strictly speaking, therefore, this Court might confine itself to a statement of that conclusion and the reasons for it, in the way that Basten JA considers appropriate. But particularly in view of the way in which the primary judge approached the matter and structured his reasons (as well as the possibility of further appeal), the preferable course, in my view, is that taken by Beazley JA. The principle of finality, as it applies to the proceedings determined by Hamilton J, has already been compromised by what is said in the judgment of the primary judge. This Court cannot change that and does not need to try to preserve something which is already lost.

17 Hoeben JA and Sackville AJA (at [284] and [285] respectively) agreed with both Beazley JA and with the additional remarks of Barrett JA (who "strictly speaking" appears to have agreed with Basten JA on this issue). In the face of those conclusions, I confess it is not clear to me what principle binds trial judges as to the proper time for determination of an immunity issue raised on the pleadings.

18 What does appear to be clear from Donnellan is that the so-called immunity, if it is to be invoked, arises by way of defence (the term used by Basten JA) and should be expressly pleaded. I do not understand any of the judgments to have treated it as an immunity in any jurisdictional sense. So much is implicit in the remarks of Barrett JA, with whom two other members of the Court agreed, in reaching the conclusion that, since the principle of finality had already been compromised, it was no longer determinative in that particular case.

19 In the present case, the advocate's immunity was not pleaded by way of defence, nor was it raised in the defendant's statement of facts and issues in dispute. It was raised for the first time in submissions in reply. Mr Moss has never been put on notice that it would be raised against him. Even if I am wrong as to its being a defence that must be pleaded, I do not think it is either necessary or appropriate for me to determine Mr Moss's claim by reference to that principle.

20 However, for the reasons explained below, the principle of finality (which underpins the immunity) does inform the consideration of one aspect of Mr Moss's claim.

Mr Moss's retainer of Reimer Winter Williamson

21 Mr Moss and Mr Eagleston both gave evidence. There was a good deal of common ground between their respective versions of events, with a number of important exceptions.

22 Mr Moss said that he first contacted Reimer Winter Williamson in around late January or early February 2007. It was his recollection that he spoke first to one of the principals of the firm, Mr Williamson, in person. He says he told Mr Williamson that he believed the newspaper had defamed him, conned him and done a hatchet job on him (T8.35). He thought that he had spoken to Mr Eagleston only after receiving correspondence from the firm with Mr Eagleston's name on it (T5.15).

23 Mr Williamson did not give evidence.

24 It was Mr Eagleston's recollection that he spoke to Mr Moss before the firm sent any correspondence in the matter. He said that the receptionist put a call from Mr Moss through to him, saying that it was a new debt recovery matter (T102). I have no reason to doubt Mr Moss's evidence that he had already spoken to Mr Williamson at that stage. However, it is clear enough from the documents kept by Reimer Winter Williamson that the matter was allocated to Mr Eagleston from the outset and that Mr Eagleston spoke to Mr Moss before any correspondence was sent to him by the firm.

25 A bundle of documents tendered by Mr Eagleston (exhibit 3) shows that Mr Miller's first contact with Mr Eagleston was on 2 February 2007. I accept Mr Eagleston's file note of that conversation as an accurate summary of the conversation. The file note states (at the page numbered 15 of exhibit 3, which is in fact the first page of the exhibit):

I spoke with William Miller who advised me that the Daily telegraph had offered him $250,000.00 for a story should it be published in relation to the Schapelle Corby case. I asked him if there was any written agreement in place, he said no it was a verbal contract between him and somebody from the Daily Telegraph. However he had copies of the articles which were published which states out (sic) that there had been a discussion in relation to a payment of $250,000 for the story.

I advised Mr Miller that any documentation he had in relation to this inclusive of the articles which had been published by the Daily Telegraph should be facsimileed over to our offices in order for me to have a look and consider at which time I could give him a definite answer. He said that he was happy with this and would facsimile over as soon as possible.

26 Mr Moss sent a 15-page facsimile to Mr Eagleston attaching copies of the two articles, a copy of Mr Moss's letter of demand dated 1 October 2005 to The Daily Telegraph together with the response received from Nationwide News, further correspondence between Mr Moss and Nationwide News in late October 2005, a document evidently prepared by Mr Moss headed "induced statement for purpose of indemnity" setting out Mr Moss's version of the underlying events relating to the Schapelle Corby case, handwritten notes prepared by Mr Moss of conversations with "Luke" (presumably Mr McIlveen, the journalist) dated 25 and 26 July 2005 and an invoice sent by Mr Moss to The Daily Telegraph dated 10 January 2007 in the sum of $250,000 for "story to do with Schapelle Corby 27 July 2005". Numbers imprinted by the facsimile machine on the top right hand corner of each page confirm that it was a 15-page facsimile, as stated on the coversheet written by Mr Moss. However, for reasons that were not explained, the tender did not include pages 13 and 14 of the facsimile (exhibit 3).

27 Mr Moss gave evidence that he also sent to Mr Eagleston a separate, hand-written note dated 2 February 2007 (exhibit E). Mr Eagleston denies ever receiving that note. The note says:

As to the p 1, please if your (sic) going to help me, and sue, I want in there conning of me and defaming and hatchit (sic) job on me.

28 It is possible that the note is meant to read "p l", not "p 1". Mr Moss could not recall what that was a reference to, but thought it may have referred to page 1 of the 15-page facsimile (T65.38). Mr Moss relies upon the reference to "conning" in that note to support his contention that Mr Eagleston ought to have advised him to include a claim against Nationwide News for unconscionable conduct or misleading or deceptive conduct (on the basis that Mr McIlveen allegedly made the promise to pay Mr Moss having no intention of doing so).

29 Mr Moss said he paid the sum of $200 to the firm and that they wrote to the publisher and the publisher wrote back. It was his recollection that the firm then asked him to pay $1,500 for an opinion from a barrister (letter dated 6 February 2007, exhibit B). Mr Moss stated that he then spoke to Mr Eagleston and explained that he could not afford the sum of $1,500.

30 According to Mr Eagleston's evidence, those events happened the other way around, that is, the firm first asked Mr Moss to pay $1,500 to obtain an opinion from a barrister and that, when he said he could not afford that amount, they then agreed to write a letter of demand for which they would charge around $200.

31 I am satisfied that Mr Eagleston's recollection, which is confirmed by the contents of his file, is correct on that issue. A file note dated 5 February 2007 records that, after receiving Mr Moss's 15-page facsimile, Mr Eagleston spoke to "Neil" (Mr Williamson) in relation to Mr Moss's matter (page 31 of exhibit 3). The note states:

Neil said that there was a pretty clear case of offer and acceptance however our best thing to do would be to seek the advice of a barrister in relation to the matter prior to beginning any proceedings. I said that I was happy with this and would inform the client.

32 A further file note also dated 5 February 2007 records that Mr Eagleston then told Mr Moss that they would need to seek the services of a barrister and that a letter would be sent to Mr Moss "outlining what had been discussed" together with a costs agreement and disclosure (page 32 of exhibit 3).

33 A letter was sent on 6 February 2007. The letter confirmed Mr Moss's instructions, confirmed Mr Eagleston's advice that an opinion from a barrister should be obtained before drafting any initiating process and sought payment in trust of the sum of $1,500. The letter also enclosed Reimer Winter Williamson's standard costs agreement and disclosure for execution by Mr Moss (pages 33 to 40 of exhibit 3). In confirming Mr Moss's instructions, the letter made no reference to any complaint of defamation. It referred only to Mr Moss's desire to proceed with an action for breach of contract.

34 It is common ground that Mr Moss told Mr Eagleston he could not pay the amount requested. Mr Eagleston's file notes record a conversation to that effect on 7 February 2007 (page 41 of exhibit 3). The note also records that Mr Moss informed Mr Eagleston that he (Mr Moss) was on a pension which enabled him to have filing fees waived and that "should we proceed with any initiating process", Mr Eagleston should forward it to Mr Moss who would file it himself in order to have the fees waived. The note records that Mr Moss then requested Mr Eagleston to prepare a letter of demand "in order to see what form of response is received from the other party before filing a statement of claim". The note continues:

I informed him that when I spoke with one of the partners here that we were of the opinion that the best way to go about it was to seek Barrister's advice prior to lodging anything however; I informed him that I would speak again with Neil and gage (sic) his thoughts on any sought (sic) of initial letter of demand. I informed him that once I had spoken to him and we had some sought (sic) of definite answer that I would get back to him and talk through all possible outcomes prior to proceeding with any sought (sic) of action.

35 Mr Eagleston gave evidence that Mr Williamson agreed that they could do a letter of demand, which would cost roughly $250, but not to do any further work without funds in trust. On 15 February 2007, Mr Eagleston sent the letter of demand to Nationwide News. The letter sought payment of the sum of $250,000 in accordance with Mr Moss's instructions as to the agreement. It made no claim or complaint of defamation (page 42 of exhibit 3).

36 Mr Eagleston sent a copy of the letter to Mr Moss, together with a memorandum of fees in the sum of $242 ($220 in fees and $22 for GST) in respect of the preparation of the letter (pages 43 and 44 of exhibit 3). Mr Moss evidently objected on the basis that he had only agreed to pay $200. An amended fee note was sent claiming $220, being $200 in fees and $20 for GST (exhibit A). Mr Moss refused to pay the GST (T4.20). He paid two amounts of $100 (pages 48 and 57 of exhibit 3).

37 Nationwide News responded to the letter of demand by letter dated 16 February 2007. The response was to deny the assertion that there was any agreement or representation that Mr Moss would be paid (page 46 of exhibit 3). The letter warned that, in the event that proceedings were commenced, the action would be defended and Nationwide News would seek recovery of its legal costs. Mr Eagleston forwarded the response to Mr Moss and sought his further instructions (page 47 of exhibit 3).

38 In summary, I am satisfied that Mr Moss approached Reimer Winter Williamson to act for him in a claim against The Daily Telegraph; that he was told that a barrister's opinion should first be obtained and that he would have to pay $1500 for that purpose; that he was unable to pay that amount and that he then persuaded the firm to accept instructions to write a letter of demand for which he would pay about $200. There is no suggestion that he retained the firm to undertake any further work after receiving a negative response to the letter of demand.

Mr Moss's dealings with Mr Eagleston

39 Mr Moss says that he and Mr Eagleston then reached a private agreement that Mr Eagleston would represent him in return for an agreed portion of any amount recovered from Nationwide News. He said the agreement was that Mr Eagleston would receive $80,000 if Mr Moss recovered $250,000; $60,000 if Mr Moss recovered $200,000; $50,000 if Mr Moss recovered $150,000 and $20,000 if Mr Moss recovered $100,000. He tendered a handwritten note allegedly recording that agreement (exhibit C).

40 Mr Eagleston accepts that a proposal in those terms was put to him by Mr Moss and that he considered it over a few days. However, according to his version of events, the proposal was made at a later point in time than asserted by Mr Moss, well after the statement of claim had been filed. Further, contrary to Mr Moss's evidence, Mr Eagleston says that he did not agree to the proposal.

41 Mr Eagleston accepts, however, that he agreed to prepare a statement of claim. His explanation for doing so was that he felt sorry for Mr Moss and wanted to help him. He gave evidence that, after he sent the response from Nationwide News to Mr Moss, Mr Moss called him almost daily over the following week asking "what we could do about the Telegraph matter". Mr Eagleston said that, each time he spoke to Mr Moss, he reminded him that the firm required him to pay $1,500 in trust for a barrister's opinion. Mr Eagleston said (T109.10):

Mr Moss continually told me that he had been dudded by the Telegraph in relation to this matter and isn't there anything else that we could do. I advised him no.

42 Mr Eagleston said that, the more he spoke to Mr Moss and the more he read the articles, the more he began to feel sorry for Mr Moss. He said that he told Mr Moss he could assist him by drafting a statement of claim but that Mr Moss would have to run the matter himself (T111-112).

43 Mr Moss did not agree that the conversation went that way. In his recollection, he connected the private arrangement with the request for payment of a barrister. As already noted, it was Mr Moss's recollection that the letter from Reimer Winter Williamson seeking $1,500 for a barrister's opinion came after the firm had sent the letter of demand and received the response from Nationwide News. The contemporaneous records have persuaded me that his recollection is wrong in that respect. It is clear that the request for payment into trust of $1,500 was made before the letter of demand was sent, but nothing particularly turns on the timing of those two events.

44 The more important issue is when Mr Moss put the proposal to Mr Eagleston to share any amount recovered from Nationwide News if he would represent him in the proceedings. Mr Moss's note of the alleged agreement (exhibit C) is not dated. According to Mr Moss's version of events, that proposal was put and accepted before Mr Eagleston drafted the statement of claim (meaning that the statement of claim was prepared in accordance with a private agreement that Mr Eagleston would act for Mr Moss on an agreed contingent fee basis).

45 According to Mr Eagleston the proposal was put but rejected at a much later point in time. Mr Eagleston claimed that he knew the conversation occurred in winter "because it was cold". On that basis, he said "so it would have been June. To the best of my recollection, it would have been around June or July" (T115.33).

46 He gave evidence that, when Mr Moss put the proposal to him, he told him that he would think about it and come back to him. According to Mr Eagleston, Mr Moss called him a couple of days later and asked whether he had considered his offer any further. Mr Eagleston says that he responded that he had and that he couldn't do it (T115.43).

47 On this issue, I did not find the evidence of either party persuasive. I think Mr Moss probably endeavoured to give an honest account of his recollection of the relevant events but it is clear that his recollection is unreliable in some respects and especially as to dates and the order in which events occurred. His account was given at a high level of generality and lacked the kind of detail which might have assisted a more satisfactory assessment of its reliability.

48 Mr Moss noted that, at the time Mr Eagleston sent him the draft statement of claim for filing, he included a "with compliments" slip with his mobile telephone number and an invitation to call him directly if he had "any problems". Mr Moss relied on the fact that Mr Eagleston gave him his personal number as a factor pointing in favour of the likelihood of his having agreed, by that time, to represent Mr Moss for the contingent fees allegedly agreed, but that fact is equally consistent with his having agreed to do so on a pro bono basis.

49 However, leaving aside poor memory of detail, Mr Moss gave a consistent account to the effect that, as soon as he indicated he could not pay the required funds into the firm's trust account, he reached the private arrangement with Mr Eagleston. In cross-examination, Mr Moss said (at T67.26):

A. So I don't owe no money to them, as I pointed out, when producing that. Basically, after the letter of rejection of 16 February, that is when the agreement was made between me and Mr Eagleston. And I was to turn around and lodge paperwork and things like that and do the running of the case until it came to the court day when he would turn around and come and represent me. Anyway, prior to the July date, he rang me and he told me that he couldn't do it because he had been sacked and that he won't get a reference if he keeps on representing me.

50 Mr Eagleston's evidence as to the order of events was more consistent with the contemporaneous records but I think that is more a reflection of the way in which the evidence was lead by his counsel than of any superior recollection. As to the timing of Mr Moss's proposal, the contemporaneous records do not assist.

51 I had the impression that Mr Eagleston's evidence on this issue may well have been coloured by professional embarrassment about his conduct of the matter. At the very least, the evidence revealed that Mr Eagleston prepared the pleading without his employer's knowledge and in defiance of his employer's insistence that a barrister's opinion should first be obtained before taking the matter any further. The case put against him was that he proceeded to draft the pleading, not out of any feeling of sympathy, but in anticipation of privately receiving a substantial share of any amount recovered from Nationwide News.

52 Extraordinarily, even on Mr Eagleston's own evidence, he did not dismiss the proposal out of hand, as plainly he should have. His evidence was that he told Mr Moss he would think about it. He explained that he was "a little put off" by the proposal because that had not happened to him before and that he wanted to be "polite" and come back to Mr Moss. He said that, a few days later, he told Mr Moss that he couldn't do it.

53 Mr Eagleston said (at T116.1):

A. I - and Mr Moss has said, "I thought you were on my side." And I said to Mr Moss, "I feel sorry for you and I have tried to assist you, but I cannot represent you in court." Mr Moss asked me to have a sick day. I knew different lawyers in Parramatta and Penrith, and I told Mr Moss that there was no way that I would be able to go and represent him outside of the firm Reimer Winter.

54 I formed the impression that Mr Eagleston was understating the extent to which he was involved in Mr Moss's case and the extent of his favourable consideration to Mr Moss's proposal. I doubt whether he rejected the proposal in the clear and unequivocal terms he asserts. I am satisfied that there was a period of time during which Mr Moss was given to understand that Mr Eagleston would represent him on the basis proposed. I am unable to conclude with any confidence when that was.

55 In any event, it is common ground that Mr Eagleston did agree to prepare the statement of claim. Whether he did so having accepted Mr Moss's proposal that he represent him in the proceedings in exchange for a share of any amount recovered from Nationwide News or because he felt sorry for Mr Moss may ultimately not matter. I will return to that issue.

56 As noted at the outset of this judgment, Mr Moss is also known as William Miller. The statement of claim was drafted in that name. Mr Eagleston sent four copies of the pleading to Mr Moss under cover of the "with compliments" slip with Mr Eagleston's telephone number on it. Mr Moss annotated that document as having been received by him on 25 February 2007 (exhibit D). The statement of claim pleaded only a claim in contract, seeking payment of the sum of $250,000 from Nationwide News, being the amount allegedly agreed in a verbal agreement made 25 July 2005 as the consideration for information Mr Moss agreed to provide to Nationwide News.

57 In a letter dated 7 March 2007, Mr Eagleston wrote to Mr Moss noting that Mr Moss had instructed Reimer Winter Williamson to cease acting for him and that he was contemplating proceeding with his own action due to a lack of funds (page 58 of exhibit 3). In cross-examination in the proceedings before me, Mr Moss agreed that he had terminated his retainer of the firm in early 2007 (T48.3).

58 The statement of claim filed in the District Court is dated 8 March 2007. It records Mr Moss as representing himself.

The end of Mr Eagleston's involvement

59 Mr Moss said that, before the case went to court, Mr Eagleston told him he could not represent him anymore and he was left to run the case himself. As explained above, there is a factual contest as to whether Mr Eagleston had agreed or represented in the first place that he would appear for Mr Moss at the hearing. I am presently concerned with the question of when any such agreement or representation came to an end.

60 The evidence before me included the transcript of the proceedings in the District Court when they were listed for mention on 16 July 2007 (exhibit 1). On that date, Mr Moss appeared for himself. Judge Delaney asked him if he was going to be running the case himself. Mr Moss replied "yes, well I can't get a solicitor to represent me, your Honour". Mr Moss asked the judge to list the proceedings for hearing on the earliest possible hearing date.

61 In considering when the matter should be listed for hearing, the judge again asked whether Mr Moss was going to have someone represent him. Mr Moss replied:

I will try to get a solicitor if I can but I don't really have the funds to pay for a solicitor. I will probably represent myself, I think it's a pretty well self-explanatory case.

62 When confronted with those remarks during cross-examination in the proceedings before me, Mr Moss agreed that Mr Eagleston had "dropped out" by that time. After accepting that Mr Eagleston had "dropped out" by 16 July 2007, Mr Moss added, "Do you want to go to the first few pages of September where I told him that Mr Eagleston dropped out on me and he said "Well we'll just have to carry on" (T53.45-T54.1). In closing submissions, Mr Moss said that Judge Delaney had asked him in September whether he had obtained representation and that he replied "No, because the bloke pulled out two months ago."

63 Those statements create the impression that, whatever Mr Eagleston had agreed to do (beyond drafting the pleading), he had unequivocally withdrawn his services by 16 July 2007. Curiously, however, there is other evidence to suggest that Mr Moss was expecting, after that date, that Mr Eagleston would represent him at the hearing. The solicitor who appeared for Nationwide News on the mention date had complained that Mr Moss had not provided adequate particulars of his claim. She sought an order for the provision of statements. The judge rejected that application, noting that no application had been filed to compel the provision of proper particulars.

64 The solicitor then filed a notice of motion, on 25 July 2007. She wrote to Reimer Winter Williamson in respect of that motion, evidently on the understanding that the firm would be representing Mr Moss at the hearing. The evidence before me did not explain how she came to think that Reimer Winter Williamson had any involvement in the case but, at least at that time, Reimer Winter Williamson apparently confirmed it. The letter, which is dated 26 July 2007, refers to a telephone conversation the previous day between the solicitor for Nationwide News and Mr Ling of Reimer Winter Williamson (page 60 of exhibit 3). The letter states:

We understand from Mr Ling that Mr Miller has instructed you to act for him in relation to the final hearing in this matter on 13 September 2007. We also understand from Mr Ling that:

1. the solicitor from your firm with carriage of the matter, Mark Eagleston, is currently on sick leave and will not be returning to the office until after the motion is heard.

2. Mr Miller has instructed you that he will appear at the hearing of the motion.

65 The letter was tendered by Mr Eagleston, not as providing any support for his case but on the basis that it was proper for him to disclose it (as being potentially supportive of Mr Moss's case). Mr Eagleston gave evidence that he did not agree with the statement in the letter (that Mr Miller had instructed the firm to act for him at the hearing). He could not explain why the letter said so (T120). He confirmed that he was on leave at that time recovering from surgery. Mr Ling was not called as a witness.

66 The contents of the letter are difficult to reconcile with Mr Eagleston's contention that he did not agree or make any representation to Mr Moss at any stage that he would appear for Mr Moss at the hearing. I accept that the letter does not stand as proof that he did, but I am left with the strong impression that neither party gave me a complete, reliable account of events relating to this issue. One possibility which is more or less consistent with the material before me is that Mr Moss put his proposal to Mr Eagleston after the 16 July mention date and that Mr Eagleston agreed at that stage to appear at the hearing (or at least did not refuse to do so) but later withdrew. However, that was not the case put forward by Mr Moss.

67 Mr Moss ultimately represented himself at the hearing of the action in the District Court. He asserts that, if Mr Eagleston had appeared for him as allegedly agreed, he would have won the case. He tendered bundles of material from those proceedings aimed at demonstrating how the hearing went off the rails due to his representing himself (exhibits J and L).

68 Mr Moss said that it was only during the hearing of the action in the District Court that he realised the claims in defamation and misleading or deceptive conduct were not part of the case. He relied upon an extract of the transcript of those proceedings (exhibit F) recording his cross-examination of the journalist, Mr McIlveen. Mr Moss attempted to put a proposition to the witness that he (Mr Moss) had been conned. That question was interrupted with an objection, with the result that no answer was given. Mr Moss then put to the witness that the witness misled him to get information. The witness denied that proposition.

69 The judge then sought to clarify what was being put, saying:

Are you saying to Mr McIlveen, are you putting to him that he permitted you to think that the Daily Telegraph would pay you $250,000 in one form or another if you told your story?

70 Mr Moss said "yes". Mr Sibtain, who appeared for Nationwide News, objected that that was not part of the pleaded case. His Honour indicated that he understood that, but that he would allow the question to be asked. The witness rejected the proposition.

71 In the proceedings before me, Mr Moss gave evidence that it was only when Mr Sibtain took that objection that he (Mr Moss) realised the claims in defamation and misleading or deceptive conduct were not part of the case. He knew the pleading only pleaded a claim in contract (T46.2) but said he understood that the other claims must have been able to be decided by the judge without being pleaded (T28.22).

72 Mr Moss expanded upon that point in his closing submissions, saying that he was told by a barrister "that that should be all included in the breach of contract" and "that just the breach of contract should cover the misleading and deceptive conduct and that" (T178). It seems likely that there was some confusion in the conversation which gave Mr Moss that understanding. A barrister is unlikely to have said that other causes of action could be determined on the strength of a pleading confined to breach of contract, but could well have said that the other causes of action, if they were to be determined, ought to have been included in the proceedings for breach of contract (that is, that all of his causes of action ought to have been pleaded in the one claim).

73 Finally, Mr Moss noted that, if he had been represented at the hearing, his lawyer would probably have sought leave to amend the pleading at that point to include the absent claims (T10.10). However, it is doubtful whether leave would have been granted at that stage, even if Mr Moss had been represented by an experienced barrister.

74 In addition to tendering the material in exhibits J and L, Mr Moss called Mr McIlveen, the journalist, as a witness in his case with a view to establishing that he could have succeeded in the claims omitted from the pleading. To the extent that it is relevant, that evidence is considered below.

Scope of the duty of care

75 Mr Moss represented himself in the proceedings before me. Understandably, he did not articulate his claim in the language of the jurisprudence relating to the duties owed by a solicitor. However, the legal basis for his claim was clear. In short, he is to be understood as contending that Mr Eagleston expressly agreed to prepare a statement of claim and that, in doing so, he fell under a duty of care to advise Mr Moss as to the causes of action available to him and the merits of any such claims and, if so instructed, to plead such causes of action. Specifically, Mr Moss contends that, in the circumstances, causes of action in defamation, unconscionable conduct and misleading or deceptive conduct ought to have been pleaded.

76 The claim concerning Mr Eagleston's withdrawal from the case is probably best understood as a discrete claim in contract based upon the alleged contingency fee agreement.

77 Mr Eagleston initially appeared to contend that he did not owe any duty of care at all in drafting the statement of claim, "particularly when [he] did so on a pro bono basis for the plaintiff's assistance" (statement of facts and issues in dispute, paragraph 2(b)).

78 However, that contention was modified during the course of the hearing. Mr Curtin submitted that, in the circumstances of this case, the fact that the task of preparing the statement of claim was undertaken on a pro bono basis meant that there was a lesser duty of care owed than if the task had been undertaken in exchange for payment (T143). Mr Curtin was not aware of any authority for the proposition that a different or lesser duty of care is owed in respect of a task undertaken on a pro bono basis. He accepted that the fact of payment or non-payment does not inform the content of a retainer or the terms of a retainer, but submitted "the fact of payment or non-payment will go to the factual issue as to whether there was a retainer of some sort" (T141).

79 Mr Curtin submitted in that context that there is appellate authority to the effect that the solicitor's duty is confined to the retainer (T100), citing the decision of Fleeton v Fitzgerald (1998) 9 BPR 16,715. That was a case in which a solicitor, although not expressly retained by the plaintiff, assumed the obligation of explaining the terms of a sub-lease to her. The Court said (per Beazley JA, Mason P and Meagher JA agreeing):

In my opinion, the third respondent's conduct in explaining the terms of the lease to the appellant, and asking whether she understood the terms went beyond the provision of casual assistance. The third respondent undertook the role of acting as a solicitor in explaining the terms of the sublease, thereby giving rise to an implied retainer. In my opinion, this is so even though no question arose as to any separate payment of fees by the appellant. I should add that the appellant's belief that she had paid the third respondent was, in my view, her misunderstanding that she was liable for the legal fees under the terms of the sublease.

As her solicitor, the third respondent owed the appellant a duty of care to exercise reasonable skill and care in relation to the subject matter of the implied retainer: see Sykes v Midland Bank Executor & Trustee Co Ltd [1971] 1 QB 113.

80 As I understood Mr Curtin's submissions, what was ultimately contended was that, if I accept that Mr Eagleston undertook to prepare the statement of claim on a pro bono basis, that is a factual consideration which informs the likelihood of his having undertaken the broader task contended for by Mr Moss of considering all available causes of action rather than the narrower task he says he undertook, of converting the letter of demand into a pleading.

81 If it was intended to maintain the original contention (set out in the statement of issues) that there is no duty of care, or a lower standard of care, in the case of services provided on a pro bono basis, that proposition must be rejected, in my view. The degree of care and skill required in the performance of a professional task cannot logically be informed by the extent of remuneration which the lawyer agrees to accept for the task. The task is the same in any case. No lawyer is obliged to undertake work on a pro bono basis, but those who choose to do so must in my view be held to the same standard of care as those who request payment for their services.

82 Further, although it is important to determine the subject matter of the relevant retainer (as noted in the passage above from Fleeton relied upon by Mr Curtin), the duty of care can transcend that contained in the express or implied terms of the retainer, according to the circumstances of the case: Hawkins v Clayton [1988] HCA 15; 164 CLR 539 at 574 per Deane J; approved in Waimond v Byrne (1989) 18 NSWLR 642 at 650 per Kirby P, Hope A-JA agreeing at 665 (Mahoney JA in dissent). It may nonetheless be accepted that the terms of the retainer are an important and often determinative consideration.

83 In order to determine the scope of the duty of care in the present case, it is necessary to resolve a number of issues of fact. As submitted by Mr Curtin, it is helpful for that purpose to recall the remarks of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319. Whilst those remarks were directed to the proof of oral statements for the purposes of an action based on misleading or deceptive conduct, they are of equal relevance to the proof of oral instructions for the purpose of determining the terms of the retainer of a solicitor. His Honour said:

In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

Instructions given in retaining Reimer Winter Williamson

84 The first issue is to determine what instructions Mr Eagleston received during the period of Mr Moss's retainer of the firm Reimer Winter Williamson. Although the firm is not sued in these proceedings, the instructions given during that period are relevant in determining the scope of the task assumed by Mr Eagleston when he agreed to draft a statement of claim after the firm had ceased to act.

85 There can be no doubt that the focus of the instructions was upon a potential claim in contract. There is nothing in Mr Eagleston's file notes to suggest that Mr Moss gave any verbal instruction to him at any stage to consider whether either of the articles defamed him or whether he had any other cause of action on the basis that he was misled. Mr Moss said that he made complaints in such terms to Mr Williamson (that he had been "conned and defamed") but there is no evidence to suggest that Mr Williamson conveyed those remarks to Mr Eagleston. Mr Eagleston said that Mr Moss frequently complained that he had been "dudded" by the newspaper but that could readily have been understood as another way of expressing the complaint of breach of contract.

86 The conclusion that there was no mention made to Mr Eagleston of any potential claim other than in contract finds support in Mr Eagleston's letter dated 6 February 2007 in which he set out his understanding of his instructions (page 33 of exhibit 3). In that letter, Mr Eagleston wrote: "we confirm the following", setting out four points, the last of which was "you wish to proceed with an action against The Daily Telegraph for alleged breach of contract as you received no payment for the story".

87 It may be accepted that Mr Eagleston was aware that Mr Moss had previously complained of being defamed. He had received a copy of Mr Moss's original letter of demand dated 1 October 2005 to the Daily Telegraph, which included the following complaint:

It just became away of selling papers and a hatch (sic) job on me, which now leaves me with no credibility and has defamed me, and maybe Miss Corby with no chance of being set free.

Made me out as a money hungry grub, when all I wanted to do was tell what I knew, with the hope of getting Miss Corby back home to Australia, and receiving the reward Ron Bakir had offered.

88 However, subject to one exception, there is no evidence that Mr Moss repeated those complaints in his initial articulation of his instructions to Mr Eagleston. The file notes suggest that he did not.

89 The exception is the evidence that Mr Moss sent a further written instruction dated 2 February 2007 in which he said that, if Mr Eagleston was going to help him and sue, he wanted in there "conning of me and defaming and hatchet job on me". Mr Moss did not pretend to have a perfect recollection of sending that instruction but gave evidence, which I have no hesitation in accepting, as to the basis on which he believes it was sent. He said he had, within his records, a copy of the same note on which he had written the word "mail". Mr Moss did not tender that document but evidently had it in his hands when he gave that evidence (T35.10). On that basis, he thought that the additional instruction was sent by mail. He added that he might have sent it by facsimile and by mail as well (T35.15).

90 At the outset of the second day of the hearing, Mr Moss gave further evidence on that issue. The effect of that evidence, if I understood it correctly, was that, having checked his papers at home overnight, he believed that the 15-page facsimile had also been sent by mail after being faxed. The basis on which he reached that conclusion was that he had found (at home) a copy of the cover page on which he had written "mail as well". That copy of the cover page was tendered and became exhibit M. What is interesting about that document is that, whereas the copy of the facsimile tendered by Mr Eagleston (which must be the copy he received, since it has the page numbers imprinted by the facsimile machine) bears no time of sending, Mr Moss's copy has "10.10 am" written in his handwriting underneath the date, together with the words "mail as well". That suggests that Mr Moss sent the facsimile and that he then wrote the time and the words "mail as well".

91 The additional instruction tendered by Mr Moss (exhibit E) also has the time "10.10 am" written under the date. On that basis, notwithstanding Mr Moss's lack of any specific recollection on this issue, I am satisfied that he probably also sent the additional instruction, first by facsimile and then, after noting the time at which it had been sent, in the post.

92 The more difficult task is to determine whether it ever came to the attention of Mr Eagleston. He gave evidence that he did not receive that document and that he had never seen it until the day before he gave evidence in these proceedings. It is not included among the material tendered from his file. However, that bundle clearly is not, and was not tendered purporting to be, a complete set of the records held by Reimer Winter Williamson.

93 As already noted, the copy of the 15-page facsimile tendered in evidence is incomplete (missing pages 14 and 15) but the omission of those pages appears to have occurred during the preparation for this hearing (rather than in the receipt of the facsimile), since the pagination of the bundle is also missing two pages. Mr Moss called for the original of the facsimile as received by the defendant (T66.13) but it was not produced (T148.15) and the absence of the two pages was not explained.

94 It seems unlikely that the 15-page facsimile was received but that the additional one-page facsimile sent at the same time was not. It is possible that the additional page was mistaken for a further copy of the cover page of the larger facsimile and discarded (at a glance, they are of similar appearance). It is also possible, of course, that the additional page was received by Mr Eagleston but that he did not remember it, or admit remembering it, when it was shown to him in preparation for these proceedings. It gave a warning that the action Mr Moss wished to bring was more complex than a simple debt recovery matter. If it was received and considered, it would undoubtedly have contributed to the impression that this was a matter in which advice should be obtained from counsel before the commencement of any proceedings, a course Mr Moss declined. However, those are all matters of speculation which were not put to Mr Eagleston.

95 Whilst I have some reservations about this issue, on balance I am not persuaded that the additional instruction came to Mr Eagleston's attention.

96 I have concluded that Reimer Winter Williamson was not retained at any stage to provide any legal services in respect of a claim in defamation. Although the material sent to Mr Eagleston made reference to a complaint in defamation, the letter dated 6 February 2007 recorded instructions relating only to Mr Moss's wish "to proceed with an action against The Daily Telegraph for alleged breach of contract as you received no payment for the story". Ultimately, the only task for which the firm accepted a retainer was to draft a letter of demand on the basis of those specific instructions. Had Mr Moss proceeded to instruct the firm to retain a barrister to give advice in respect of the commencement of proceedings, a broader duty may well have arisen but that is not the course Mr Moss took.

97 The same considerations apply in respect of any claim for unconscionable conduct or misleading or deceptive conduct. In my view, the content of Reimer Winter Williamson's retainer was expressly confined to the task of drafting a letter of demand in respect of the instructions confirmed in the letter dated 6 February 2007, which were confined to an alleged breach of contract.

Responsibility assumed by Mr Eagleston upon termination of the retainer

98 The next question is whether, in taking on the task of preparing the pleading, Mr Eagleston assumed any broader responsibility than to plead the cause of action identified in the letter confirming instructions and the letter of demand. In considering that question it is necessary to determine, to the extent possible, the content of the communications which resulted in Mr Eagleston's agreeing to prepare the statement of claim.

99 There is no direct evidence that Mr Moss instructed Mr Eagleston at any stage that he wished him to include or consider any cause of action other than in contract. However, Mr Eagleston accepted that he had turned his mind to the issue of defamation. He gave an account of his thinking on that issue which I found very strange. After saying that he had not ever previously seen Mr Moss's written instruction about defamation (until the day before giving evidence in these proceedings), he was asked whether Mr Moss had ever raised the topic of defamation orally. He said (at T113.37):

A. The only time that we ever came close to talking about defamation was when Mr Moss made the comment that he didn't like what was written about him in the Telegraph even if it was true. I also did journalism at university, and we did some stuff on defamation at university. And as I understood it, truth was a defence to defamation. So I never turned my mind to it any further or pushed Mr Moss on that topic any further.

100 Mr Eagleston could not remember when that conversation occurred but he accepted that it was before he drafted the statement of claim. Demonstrating a better insight into the inherent complexities of defamation than revealed by Mr Eagleston's evidence set out above, Mr Moss asked him in cross-examination what it was that he thought was true. Mr Eagleston claimed not to understand the question. Mr Moss pressed him, as follows (at T123.1 to T123.33):

Q. What is the truth?

A. You are asking me what I believe is the truth in the statement that you made to me being "I don't like what they wrote about me in the Telegraph even though it's the truth"?

Q. Yes?

A. Well, I would be saying, I think both the articles on 27 and 28 July and every reference that has been made to me was my understanding from that comment you made to me.

Q. Every reference what?

A. You made the comment to me "I don't like what they wrote about me even though it's the truth". And from that, my understanding was the two articles the Telegraph wrote on 27 an 28 July, because they were the two articles you were referring to when you said "what the Telegraph wrote about me".

Q. What's the part of the truth?

A. I don't know. You made the comment, Mr Moss.

Q. But you must know what the truth was to turn around and decide not to discuss any defamation with me?

A. Both the articles referred to you, Mr Moss, and you have made a statement to me that indicated that everything that was written about you in those articles, although you did not like them, was the truth.

Q. I still don't believe you have answered the question as to the truth?

A. I have taken your word, Mr Moss, on the fact that you didn't like what was said about you, even though it was the truth. So, what's been written about you by the Telegraph you have said to me was the truth but you didn't like what they wrote. And given the fact that you indicated to me what was written about you was the truth, my understanding of defamation law is that truth is a defence to any claim for defamation.

101 I found Mr Eagleston's evidence on that issue quite unconvincing. Most importantly, the evidence reveals unequivocally that he did turn his mind to the issue whether Mr Moss had a cause of action in defamation. I do not accept that he did so only in the context of a remark by Mr Moss to the effect that what was written about him in the articles was true. I do not accept that Mr Moss made any such remark, certainly not extending in terms to "everything that was written" about him in the articles, as asserted by Mr Eagleston at T123.24. A statement to that effect would have been completely inconsistent with Mr Moss's position stated in the letter of demand dated 1 October 2005. In that letter, Mr Moss complained that the articles made him out as "a money hungry grub", an imputation he plainly does not accept to be true.

102 In my view, Mr Eagleston's evidence on that issue was a telling revelation of his state of knowledge at the time he prepared the statement of claim. I am satisfied that Mr Eagleston well knew that Mr Moss thought he had been defamed by the articles, based on what was written in the original letter of demand drafted by Mr Moss and probably also from statements made to Mr Eagleston by Mr Moss at some stage. I am further satisfied that it was in that context that Mr Eagleston turned his mind to the issue of defamation.

103 However, the evidence falls short of establishing that Mr Eagleston was instructed, and agreed, to give advice about defamation or to include a claim for defamation in the pleading. As best I am able to ascertain from the evidence before me, it appears that Mr Moss made an assumption that the pleading would comprehend his several grievances with Nationwide News, whereas Mr Eagleston assumed that the task entailed no more than to plead a claim in contract based on the newspaper's failure to pay for the information provided as allegedly promised.

104 As already noted, Mr Curtin submitted that a further factual issue potentially informing the content of any duty which fell upon Mr Eagleston is the terms on which he agreed to prepare the statement of claim. According to Mr Moss, the statement of claim was prepared by Mr Eagleston after he had agreed to act for or represent Mr Moss privately in return for a portion of any verdict recovered from Nationwide News. Mr Eagleston denies ever agreeing to act on that basis and says that he volunteered to prepare a statement of claim without fee, because he felt sorry for Mr Moss and before any discussion of payment.

105 Mr Curtin submitted that the issue of remuneration logically informs the likely extent of the task assumed. If Mr Eagleston clearly said from the outset that he could not act for Mr Moss, but agreed to prepare a statement of claim without fee in order to help Mr Moss, it is reasonable to conclude that the task assumed was simply to convert Mr Moss's complaint into a proper pleading. By that stage, the complaint had been distilled (in the letter dated 6 February 2007 confirming instructions) as a claim in contract.

106 The case put on behalf of Mr Moss was, in effect, that Mr Eagleston undertook to represent him in proceedings against Nationwide News in return for a substantial portion of any verdict recovered and that, on that basis, a broader obligation was assumed.

107 I have concluded that the issue of remuneration is not relevant in the circumstances. In my view, the critical consideration is the fact that, whatever the financial basis on which Mr Eagleston agreed to prepare the statement of claim, he did so by reference to the instructions he had recorded in the letter dated 6 February 2007. As already noted, Mr Moss appears to have made an assumption that Mr Eagleston would include all of his complaints against Nationwide News in the pleading. However, he gave no evidence of any conversation giving instructions to that effect. I am satisfied that, in all the circumstances viewed objectively, all Mr Eagleston agreed to do was to prepare a pleading based on the instructions recorded in his letter and reflected in the letter of demand.

108 It must also be recalled that Mr Eagleston's initial advice was for Mr Moss first to retain a barrister to provide an opinion. Mr Moss chose not to take that course. Rather, he pressed Mr Eagleston to assist him without the benefit of such advice. In those circumstances, Mr Curtin submitted that Mr Moss was not vulnerable in the sense in which that term is understood in the relevant authorities: see Woolcock St Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515 at 533 per Gleeson CJ, Gummow, Hayne and Heydon JJ at [31]. In my view, there is some force in that submission.

109 For those reasons, I am not satisfied on the balance of probabilities that Mr Eagleston assumed responsibility or otherwise fell under a duty of care to advise Mr Moss as to the cause of action in defamation or to include any other causes of action in the statement of claim drafted by him.

Breach of duty

110 In case my conclusion on that issue is wrong, it is appropriate to consider the issue of breach of duty. The case pleaded by Mr Moss was that Mr Eagleston should have advised him on the cause of action in defamation and should have included the three additional causes of action in the statement of claim. However, Mr Moss's submissions did not grapple with the merits of those claims. Rather, the case implicitly assumed that, whatever the merits of the other causes of action, it was negligent not to include them in the pleading.

111 In my view, it cannot have been negligent not to include in the pleading any cause of action which was not reasonably arguable on the material before the solicitor.

112 Neither party led any expert evidence at the hearing. Accordingly, I must make my own assessment of that issue, doing the best I can on the limited evidence before me.

113 Mr Eagleston contends, in effect, that the defamation claim was hopeless because it was statute-barred by the time Mr Moss approached Reimer Winter Williamson in early 2007 (paragraph 10 of the defence to the amended statement of claim). It is undoubtedly correct that the claim was statute-barred. The articles were published on 27 and 28 July 2005. The limitation period for an action in defamation was (and still is) one year: see s 14B of the Limitation Act 1969.

114 However, it is necessary to consider whether Mr Moss had any prospect of obtaining an extension of that limitation period. In respect of that issue, Mr Curtin relied on the decision of Beech-Jones J in Ritson v Gay & Lesbian Community Publishing Ltd & Ors [2012] NSWSC 483. In that circumstance, I also drew Mr Moss's attention to my decision in Houda v State of New South Wales [2012] NSWSC 1036, in which I had applied Ritson. On the strength of those authorities, Mr Curtin submitted that Mr Moss's prospect of obtaining an extension of the limitation period was next to zero (T169), a contention well supported by those authorities.

115 During the course of writing this judgment, I realised that those decisions were concerned with the wrong test, being applications of s 56A of the Limitation Act as presently in force. Mr Moss's causes of action accrued on 27 and 28 July 2005. At that time, as now, there was power under the section to extend the limitation period to a period of up to three years running from the date of publication. However, the statutory test for determining whether an extension should be granted has changed. The test considered in Ritson was introduced by the Defamation Act 2005, which commenced on 1 January 2006 (see section 2 of the Act). The old provision continued to apply after the commencement of the Defamation Act 2005 to any cause of action that accrued before the commencement of that Act: see clause 7(3) in schedule 5 of the Limitation Act.

116 The hearing thus proceeded on the incorrect premise that Mr Moss would have had to satisfy the new test, which is very draconian. It requires a plaintiff to establish that it was not reasonable in the circumstances for him to have commenced an action within one year and there is no power to make an order unless the court is so satisfied. In truth, under the test applicable to Mr Moss, he would only have had to satisfy the court that it was just and reasonable to extend the limitation period. As at 27 and 28 July 2005, the section provided:

(4) After hearing such of the persons likely to be affected by the application as it sees fit, the court may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period as it determines. However, the court cannot extend the period beyond 3 years running from the date on which the defamatory matter concerned was published.

117 Accordingly, any application for an extension to the limitation period would not have been governed by the decision in Ritson. Since neither party had been heard on the issue of Mr Moss's prospect, as at February 2007, of obtaining an extension of the limitation period applying the old test, which was considerably more lenient, I considered it necessary to afford the parties that opportunity.

118 Mr Curtin provided supplementary written submissions dated 30 January 2014. Those submissions repeated the contention that the prospects were "nil or very low, say 10%" but did not grapple with the point raised, which was the fact that the hearing had proceeded on an incorrect premise as to the applicable test and the opportunity to address Mr Moss's prospects under the correct test.

119 Mr Moss also provided further submissions (in a series of emails). His first point was that the question of the applicable test does not arise, since the defence was run on a different basis (that he had told Mr Eagleston the articles were true)(emails dated 22 and 23 January 2014). That does not obviate the need for me to consider this issue.

120 In separate emails dated 22, 24 and 28 January 2014, Mr Moss appeared to contend that the defendant's submission as to the cause of action being statute-barred was foreclosed by the decision of the Court of Appeal in Moss v Eaglestone [2011] NSWCA 404. Mr Moss evidently understands that decision to have entailed an unqualified determination that he could proceed with his defamation action. That is a misconception as to the effect of the decision, which was confined to the question whether prosecution of the action was foreclosed by Mr Moss's bankruptcy. The Court did not purport to address any other issue concerning the merit of the action.

121 Mr Moss's evidence did not address his reasons for not commencing an action within the limitation period. However, in his closing submissions, he explained that he had tried to pursue a claim in defamation in 2005 but had been advised by a solicitor and a barrister that his criminal history "would probably be a problem" (T176.38). He said that, between the time when he saw that solicitor and the time when he approached Reimer Winter Williamson, he "tried many solicitors" to take on the case and that nobody would help him. He said that he had subsequently learned that having a criminal record was not necessarily an impediment to recovering damages for defamation. Although that explanation was provided only from the bar table, there was no objection to my having regard to it.

122 The evidence and Mr Moss's submissions reveal that, during the limitation period, he was aware of the publication and the identity of the publisher; that he considered commencing proceedings; that he obtained legal advice and that he did not sue. However, it appears that the content of the advice (concerning the relevance of the criminal record) contributed to his decision not to sue and that subsequent advice was to a different effect. The criminal record was not an impediment to success on the imputations considered below. It was potentially relevant to damages, depending on the evidence at the trial, but it did not foreclose the prospect of a substantial verdict. Further, the two articles themselves are plainly defamatory (subject to any defences). I consider that there was a reasonable prospect of Mr Moss persuading a court to grant an extension of the limitation period under the old test (that it was just and reasonable to do so).

123 Assuming (contrary to the conclusion I have reached) that Mr Eagleston was under a duty of care to give advice as to the cause of action in defamation, the advice that ought to have been given concerning the fact that the action was statute-barred is, in my view, to the effect set out above. The advice should, however, also have warned that there was an appreciable risk that the application would be unsuccessful and that Mr Moss would have to pay the defendant's costs.

124 As to the merits of the underlying cause of action (leaving aside the problem with the limitation period), the advice ought to have considered whether the articles were defamatory and, if so, the likely success of any apparent defences.

125 A reasonably competent person with specialised knowledge in the field of defamation would have advised Mr Moss that the articles were plainly defamatory of him and that the critical consideration was whether the imputations were defensible.

126 As to the precise defamatory meanings conveyed by the articles, it is appropriate for present purposes for me to confine my attention to the meanings set out in the amended statement of claim filed 8 February 2012 in these proceedings, as follows:

a. The publication on 27 July in its natural and ordinary meaning was defamatory of the plaintiff and carried the following defamatory imputations:

i. The plaintiff demanded $250,000 for a story which he knew had no credibility.

ii. The plaintiff sought $1,000,000 for a reward to which he was not entitled.

iii. The plaintiff was a disreputable person seeking to make financial gain.

iv. The plaintiff could not be believed because he was a self-confessed criminal.

v. The plaintiff was untrustworthy as he was not believed by his own solicitor.

vi. The plaintiff could not be trusted because he was a small-time shyster.

b. The publication on 28 July in its natural and ordinary meaning was defamatory of the plaintiff and carried the following defamatory imputations:

i. The plaintiff demanded $250,000 for a story which he knew had no credibility.

ii. The plaintiff was a disreputable person seeking to make financial gain.

iii. The plaintiff lacked credibility because he was a convict who had served time in prison.

iv. The plaintiff was regarded by the Bali Chief Prosecutor in the Schapelle Corby case as not being a suitable witness to testify, having no credibility.

127 Each of those imputations is probably or at least arguably conveyed. The more difficult task would have been to form a view as to the strength of any defence available to Nationwide News. The obvious defence would have been the defence of truth under s 15 of the Defamation Act 1974. Pursuant to that section, the publication of any defamatory imputation could be defended on the basis that the imputation was a matter of substantial truth and either related to a matter of public interest or was published on occasion of qualified privilege. The advice should have been that the newspaper would probably be able to establish that the imputations related to a matter of public interest. The more difficult question would have been to assess the newspaper's prospects of establishing that each imputation was a matter of substantial truth.

128 It is difficult, on the strength of the limited evidence before me, to make a reliable assessment as to how that issue ought to have been assessed by a reasonably competent practitioner presented with Mr Moss's case in 2007. It may be noted that each of the imputations raises an issue directed to Mr Moss's credibility, reliability or trustworthiness. Mr Moss does have a record of criminal convictions (exhibit 2) and that certainly would have been a relevant consideration in assessing the strength of any truth defence in response to those imputations.

129 However, it would also have been relevant to consider whether Mr Moss's version of events concerning the Schapelle Corby case was plausible. There is little evidence before me on that question. I did not find Mr Moss inherently implausible. But, had I been retained to give the advice it is now said ought to have been given, I would have insisted on having a lot more information than was placed before me in these proceedings, or else given heavily qualified advice.

130 The contention Mr Moss has undertaken to prove in these proceedings is that it was negligent not to advise him that he had a reasonable prospect of success in a claim in defamation. On the strength of the limited evidence before me, I cannot be satisfied of that fact. That conclusion disposes of the separate contention that it was negligent not to include the cause of action in defamation in the pleading.

131 As to the alleged negligence in failing to plead a cause of action in unconscionable conduct, Mr Moss gave no relevant evidence and made no submissions. He has not persuaded me that it was negligent not to include that claim in the pleading.

132 The issue whether it was negligent not to include a cause of action in misleading or deceptive conduct is more difficult to determine. For the reasons already explained, I do not think Mr Eagleston assumed a duty of care to consider or plead all available causes of action. Rather, in my view, the task assumed by him was confined to pleading the cause of action articulated in the letter dated 6 February 2007 confirming Mr Moss's instructions. However, if that conclusion is wrong and a broader duty was assumed to include any cause of action available on the strength of the instructions recorded in that letter, in my view a reasonably competent practitioner faced with those instructions would have considered including an alternative claim in misrepresentation.

133 The 15-page facsimile provided to Mr Eagleston by Mr Moss included an exchange of correspondence dated 28 October 2005 which clearly addressed the issue whether any representation had been made to Mr Moss that he would be paid for his information if a story was published.

134 The instructions recorded in the letter dated 6 February 2007 included the following:

Once the Daily Telegraph found out about this they wanted to use it for a story and negotiations took place between yourself and the Daily Telegraph in relation to a fee of $250,000 for your story. The story was published by the Daily Telegraph however you never received your payment of $250,000.

135 Those instructions were equally capable of flagging a potential claim in misrepresentation as in contract. However, there is simply insufficient evidence before me to conclude that any such claim had a reasonable prospect of success. Accordingly, I am not satisfied that there was any breach of duty.

Was a chance lost?

136 In case those conclusions are wrong, it is appropriate to consider the question of causation of loss.

137 The principles relating to the question of causation of loss and its proper assessment in cases based on the alleged loss of a chance were considered by the Court of Appeal in Heenan v Di Sisto [2008] NSWCA 25. In that case, a solicitor acted on the sale to a developer of two adjoining properties. He was found to have been negligent in failing to make the completion of the two contracts of sale interdependent. The developer failed to complete both contracts. The Court held that, in order to establish that a chance was lost as a result of the solicitor's negligence, the vendors had to establish, on the balance of probabilities, that they would have accepted his suggestion made in seeking instructions that the contracts be made interdependent.

138 Mr Curtin submitted that, taking Mr Moss's case at its highest, the only breach of duty committed by Mr Eagleston was the failure to advise Mr Moss to bring an application for an extension of the time within which to bring proceedings for defamation. That overlooks the other causes of action now relied upon by Mr Moss, which were not time-barred. As to those claims, the question is whether, on the balance of probabilities, had Mr Eagleston raised the possibility of including a claim for unconscionable conduct and misleading or deceptive conduct, Mr Moss would have instructed him to include those claims in the pleading.

139 By the time of the hearing before me Mr Moss did not appear to have any enthusiasm for a claim in unconscionable conduct. He has not put anything before me to persuade me that he would have pursued such a claim, if appropriately advised. As to the claim in misleading or deceptive conduct, in my view Mr Moss plainly would have pursued such a claim if so advised.

140 The defamation action is more difficult. For the reasons explained above, I consider there was some prospect of Mr Moss persuading a court to grant an extension of the limitation period but an appreciable risk that the application would be unsuccessful and that Mr Moss would have to pay the defendant's costs. It follows that the question is whether, had Mr Moss been so advised, he would have given instructions to include a claim for defamation and to seek the extension of time.

141 Mr Curtin noted the caution with which the Court should approach this issue being, as it inherently is, one on which the view of a plaintiff is often coloured by hindsight.

142 However, that consideration is not a direction to ignore the characteristics of the relevant plaintiff. Mr Moss has demonstrated himself to be a man of unusual optimism and persistence. As he reminded me in his closing submissions, his dogged determination to pursue the present claims is seen in his successful earlier appeal in these proceedings, which resulted in the important decision of the Court of Appeal in Moss v Eaglestone. Based on my assessment of Mr Moss and his conduct of the proceedings before me, I am satisfied that he would have given those instructions.

143 Accordingly, assuming (contrary to the conclusion I have reached) that there was a breach of duty, I am satisfied on the balance of probabilities that Mr Moss would have instructed Mr Eagleston to pursue claims in defamation and misleading or deceptive conduct and, accordingly, that he lost a chance of prosecuting those claims.

Value of the lost chance

144 It is accordingly necessary for me to determine the value of the lost chance. For the reasons already explained, I consider there was some prospect of obtaining an extension of the limitation period with an appreciable risk that the application would be unsuccessful. For present purposes, as difficult as it is, I must quantify that chance. In all the circumstances considered above, I am of the view that Mr Moss had about a 30% chance of obtaining an extension of the limitation period.

145 It is extremely difficult to quantify Mr Moss's prospects of succeeding in the defamation action itself. The most significant aspect of that assessment is to determine the likelihood that the newspaper would have succeeded in proving the defence of truth. Since that task was never embarked upon, the present exercise is necessarily speculative. As already noted, the imputations focus primarily on Mr Moss's credibility, reliability or trustworthiness in respect of his claim to have information that would establish the innocence of Schapelle Corby. One relevant consideration is the fact that, in his cross-examination of the journalist, Mr Moss established that the journalist had no basis for reporting that Mr Moss's story was unreliable other than remarks attributed to Mr Moss's lawyer, Mr Croke (T84). It is significant that, at the time of publication, there was no other basis for the newspaper to discredit his story. The journalist noted that he had been reporting the remarks of another person but it is well-established that, in doing so, he became a publisher of any imputation conveyed by those remarks.

146 It follows that the defence of justification may well have turned very much on an assessment of Mr Moss's credibility, something I am in a position to assess.

147 Mr Moss might be described as a colourful character and I appreciate that he has a criminal record. I do not think he was lying about the events he associates with Schapelle Corby's arrest. Whether those events are in fact relevant to her case is another issue. Mr Moss's version (set out at page 25 of exhibit 3) amounts, in effect, to his saying that he was approached to collect a package in exchange for payment of a substantial sum (a proposal to which he did not in fact agree) and that, soon after Ms Corby's arrest, he was told not to worry about the pick-up as the parcel had gone to Bali by mistake.

148 Mr Moss associates the two events, concluding that the package he was asked to collect must have been the drugs in possession of which Ms Corby was arrested. He further appears to have inferred that she must not have known about the drugs and that she was an innocent dupe. The reasonableness of his drawing those conclusions is simply impossible for me to assess. They are not inherently implausible.

149 The significant consideration for present purposes is that, on his own evidence, the journalist formed a view (which he reported in The Daily Telegraph) that Mr Moss's story was unreliable on the strength of the lawyer's remarks and without knowing anything of the underlying facts. Doing the best I can on that limited evidence, I consider that Mr Moss had some prospect of succeeding in a claim in defamation. I would assess that chance as being about 30%. On the strength of the imputations set out above, he would have received a verdict in the order of $100,000 to $150,000 if successful. It follows that his lost chance is to be valued as 30% of 30% of that range (up to $13,500).

150 The task of quantifying the value of the lost chance to prosecute a claim for misleading or deceptive conduct is informed by different considerations. That claim would have been an alternative cause of action to the claim in contract based on the same evidence. Mr Curtin submitted that the lost chance was of no value. In support of that contention, he relied upon a series of specific passages from the judgment of Delaney DCJ, who determined the claim in contract.

151 Upon reflection, I think there is a difficulty with that approach. I cannot rely upon that judgment in this proceeding to prove the existence of any fact that was in issue in the proceedings before his Honour: see s 91 of the Evidence Act 1995. Further, it is doubtful whether it is appropriate for me to revisit his Honour's findings, since that would offend the principle of finality. In any event, it is not necessary for me to do so, since Mr Moss has put nothing before me that has persuaded me that, had a claim in misleading or deceptive conduct been included in the statement of claim, that claim would have been successful. In particular, there is no basis in the evidence before me for concluding that Mr McIlveen made a promise or representation that he would pay Mr Moss having no intention to do so.

152 It follows that the lost chance to prosecute that claim is of no value.

Was Mr Eagleston under an obligation to appear at the hearing?

153 A separate complaint made by Mr Moss is that Mr Eagleston, having agreed to represent him at the hearing, later said that he could not do so, with the result that Mr Moss lost the action in the District Court. As already noted, it is probably appropriate to determine that claim as one in contract.

154 For the reasons explained above, I found the evidence of both parties on this issue unpersuasive. I have ultimately reached the conclusion that it is not necessary to determine whether an agreement was in fact reached that Mr Eagleston would represent Mr Moss at the final hearing in exchange for a portion of any amount recovered from Nationwide News.

155 On any view, the evidence reveals that, by 16 July 2007, Mr Moss understood that Mr Eagleston would not be representing him and that, with that knowledge, he sought an early hearing date from Judge Delaney, intending to run the case himself. It is clear from the transcript of that mention date that the proceedings had not been listed for hearing at the time Mr Eagleston withdrew. I do not think it would be reasonable to conclude, if there was an agreement, that it was one from which Mr Eggleston could not withdraw under any circumstances. Whatever had been agreed or represented previously, I am not satisfied that Mr Eagleston was obliged to appear at the hearing.

Was a chance lost?

156 In case that is wrong, it is again appropriate to consider whether a chance was lost and the value of the lost chance. As to whether a chance was lost, it is clear that, if Mr Eagleston was obliged to appear at the hearing, Mr Moss lost the chance for that to occur.

157 However, I am not persuaded that the chance was of any value. The material tended by Mr Moss for the purpose of establishing the ways in which the hearing allegedly went off the rails due to his being unrepresented in fact persuaded me that Mr Moss laboured under no disadvantage for being unrepresented. Some of the material was directed to establishing that the judge dealt with Mr Moss in a manner different from the way in which he would have dealt with a legal representative. If there was any difference, in my view it was that the judge was at pains to ensure that Mr Moss was not disadvantaged by reason of being unrepresented.

158 Mr Eagleston was, by the time of the hearing, a solicitor of less than one year's experience. Although Mr Moss is not legally trained, he has the advantage often displayed in the case of litigants in person of knowing the facts very well and having a strong determination to succeed.

159 Further, my consideration of the reasons for decision of Judge Delaney has not persuaded me that the result in the case would have been any different had Mr Moss been legally represented. On balance, I am not persuaded that, if Mr Moss lost the chance to be legally represented at the hearing, that lost chance was any value.

Conclusion

160 The orders are:

(1) That the proceedings be dismissed.

(2) That the plaintiff pay the defendant's costs.

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Decision last updated: 05 March 2014