The Solicitors' Liability Committee v Gray, Garrick Lewis & Winter, Michael Frederick [1997] FCA 652

FEDERAL COURT OF AUSTRALIA LEGAL PRACTITIONERS - professional duty - solicitor's professional indemnity insurance - the concept of a solicitor's professional legal practice contrasted with entrepreneurial and promotional activities undertaken by a solicitor - ordinary functions of a solicitor - activities of a solicitor having a professional character - the solicitor/client relationship - instructions from a client - dual activities of other professionals - the giving of "purely commercial" advice - ethical responsibilities of a lawyer in relation to law-related services - professionalism and the modern solicitor - whether retainer in relation to the acquisition of a kiwi fruit orchard was a retainer within the scope of practice as solicitors - whether liability incurred in the settlement of an action for damages arose in connection with the solicitors' practice - whether marketing or promotion of investments in the area of property syndication, in conjunction with accountants seeking investment and taxation advantages for clients, part of the practice of a solicitor - negotiations of agreements for the sale and purchase of land, plant and equipment - purchase at auction - arrangement of finance for the purchase - receipt by solicitor of an acquisition fee expressed as a percentage of the purchase price - recruitment of partners in a syndicate. INSURANCE - construction of insurance policies - scope of indemnity - whether weight to be given to the statutory context, origins and rationale of a policy. PROFESSIONAL INDEMNITY INSURANCE - indemnity for costs reasonably and necessarily incurred in proceedings arising out of a claim against the insured following settlement of the claim against the insured - application to set aside settlement - meaning of "necessarily". Mann v Hulme (1961) 106 CLR 136, distinguished Hawkins v Clayton (1988) 164 CLR 539, distinguished Hill v Van Erp (1997) 142 ALR 687, distinguished Drayton v Martin (1996) 67 FCR 1, distinguished Leary v Federal Commissioner of Taxation (1980) 32 ALR 221, applied Henderson v Amadio Pty Ltd (No 1) (1995) 62 FCR 1, applied Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398, considered Haseldine v Hosken [1933] 1 KB 822, considered Restatement of the Law Governing Lawyers, Tentative Draft No 8, March 21, 1997, Section 79, p 124 State of Florida v Sperry (1962) Fla 140 So (2d) 587, considered Sheinkopf v Stone 927 F 2d 1259, considered Law Society of NSW v Harvey [1976] 2 NSWLR 154, considered Federal Commissioner of Taxation v Snowden & Willson Proprietary Limited (1958) 99 CLR 431, applied THE SOLICITORS' LIABILITY COMMITTEE v GARRICK LEWIS GRAY and MICHAEL FREDERICK WINTER No. VG 546 of 1996 Judges: Lockhart, Beaumont, Burchett JJ. Place: Sydney (heard in Melbourne) Dated: 21 July 1997