In a hearing before NSW Court of Appeal Justices John Basten, Christine Adamson and Anthony Meagher on Tuesday, Pitcher Partners’ barrister David Williams SC argued the lawsuit brought by Diane Twigg against the accounting firm was an abuse of process and should be dismissed.  

The appeal challenges a February judgment by Justice James Stevenson, who rejected Pitcher Partners’ claim that Twigg’s “forensic decision” not to join the firm to earlier proceedings had led to a prejudicial delay.

On Tuesday, Justice Basten criticised Williams’ argument that the primary judge failed to properly consider cross-examination of Diane Twigg’s lawyer Christiaan Roberts, saying Pitcher Partners wanted the appeals court to “draw an inference on not a single concession”.  

“To say that his Honour doesn’t consider your [cross-examination] is terrible, frankly,” said Justice Basten.  

In a September 2020 judgment, Supreme Court Justice Michael Ball found that Twigg had transferred $100 million in funds obtained through the sale of his family’s waste management and landfill business in 2007 to firms he controlled.

Pitcher Partners claims Roberts and Diane Twigg made a “forensic decision” not to join the accounting firm to the first lawsuit, and says the solicitor knew or should have known there were available claims against the accounting firm from 2019. Diane Twigg should not have a new opportunity to bring the claims against Pitcher Partners now, the accounting firm argues.

Williams said on Tuesday that Roberts knew or should have known that Twigg had potential claims that Pitcher Partners breached its alleged fiduciary duty owed to her or that it knowingly assisted Max Twigg in his “fraudulent design” to misappropriate $127 million. 

The barrister claimed Roberts conceded during cross-examination at first instance that he considered there was a possible fiduciary relationship and therefore made a decision not to sue Pitcher Partners at that time.

But Justice Adamson said the allegation that Roberts made such a concession during cross-examination seemed “entirely devoid of evidence”.

“How can you say that decision was made when his evidence didn’t go that far? He didn’t even raise with counsel the possibility of pursuing your client,” the judge said. 

“I have read the cross-examination. I just can’t find anything there…we have a different view of how successful your cross-examination of Roberts was.”

Roberts was ‘badgered into’ minor concession, says judge

Justice Adamson said Roberts only gave an “extremely minor concession” that he had considered the issues of the alleged fiduciary relationship but there was no evidence he made a “forensic decision” not to sue the accounting firm during the first case. 

Williams said Roberts made several concessions in cross-examination, a pertinent one being that he “considered” whether a fiduciary duty existed. 

But on reviewing the exchange, Justice Adamson said Williams “badgered [Roberts] into it” and that her preliminary view was the solicitor had been “worn down”. 

Justice Meagher said he understood Roberts’ statement to mean he did not really focus on whether there was a fiduciary duty but rather he assumed the mere fact of an accountancy relationship was not enough to give rise to such obligations. 

“He didn’t really enter into a serious consideration of it at all,” said Justice Meagher. 

Diane Twigg’s case will cause ‘unjustifiable oppression’, court told

Williams argued Twigg sought to “relitigate” the same matter against Max Twigg but now against Pitcher Partners, saying the new case was an abuse of process because it will cause “unjustifiable oppression” or bring the “administration of justice into disrepute”. 

“When one has a first set of proceedings that involves substantially the same matters as the second set that gives rise to the possibility of inconsistent findings…will cause irreparable prejudice to Pitcher Partners in current proceedings and is contrary to current modern case management principles,” he said.

“It will occupy significant public and private resources and it is contrary to the interests of the administration of justice.”

While lawyers cannot be expected to “sue each and every party potentially liable”, Roberts’ alleged choice not to sue Pitcher Partners at first instance was relevant to whether the new case should be allowed as it unfairly burdened the accounting firm, said Williams. 

“A reasonable solicitor who is acting on behalf of the client in an action such as this [would have joined Pitcher Partners],” he said.

Williams argued Roberts knew there was a likely “shortfall” in trying to recover money from Max Twigg and should have actively considered bringing a claim against Pitcher Partners at that time. 

“It is one thing not to bring other defendants into a matter where there is a reasonable expectation of recovery against a wrongdoer but it’s another matter where one has a reasonable belief there’s likely to be a shortfall,” he said. 

But Justice Adamson said that just because there is a shortfall, it does not mean a lawyer can sue to get full recovery. 

‘It would create satellite litigation of an extraordinary kind’

Barrister for Twigg, Michael Elliot SC, said if Pitcher Partners won its appeal it would “turn every abuse of process case into a negligence suit” against solicitors who could have joined defendants but did not. 

“It would create satellite litigation of an extraordinary kind,” he said.  

Elliot said that Roberts dealt with extremely complex litigation in running the case against Max Twigg and that Pitcher Partners had not properly considered his position. 

“It is all very well for Pitcher Partners to stand here and be critical of Mr Roberts but if they are going to do that, they should make a serious attempt to put themselves in his position,” he said. 

“It is only now with enormous hindsight and self-interest that Pitcher Partners seeks to critique Mr Roberts in this way.”

It only emerged at the final hearing and in late discovery during the case against Max Twigg that Pitcher Partners “were taking upon themselves a role” of acting both for Diane Twigg, the Twigg companies and Max Twigg, who had allegedly divergent interests. 

“None of these details were known to Mr Roberts at the time,” he said. 

Diane Twigg, who is trustee for the family trust, filed the lawsuit in the NSW Supreme Court, alleging Pitcher Partners breached fiduciary duties owed to herself and the Twigg Group and knowingly assisted Max Twigg in transferring $127.8 million to firms he controlled.

The lawsuit alleges Pitcher Partners “advised and assisted” Max Twigg in misappropriating assets in breach of his fiduciary duties to companies he controlled as director in the corporate group.

Diane Twigg claims Pitcher Partners helped Max Twigg in diverting $155.8 million in proceeds from the sale of Twigg Group assets to Cleanaway Waste Management to himself and entities he controlled.

“In so doing, [Pitcher Partners] breached their fiduciary duty of undivided loyalty to the plaintiffs and further knowingly assisted Max Twigg in a fraudulent and dishonest design,” the lawsuit says.

According to Diane Twigg’s lawsuit, Pitcher Partners provided services to the Twigg Group from the early 1990’s on taxation, accounting, corporate structuring and corporate succession planning.

The appeals court has reserved judgment.

The Twigg family is represented by Michael Elliot SC and David Smith, instructed by Roberts & Partners Lawyers. Pitcher Partners is represented by David Williams SC and Jocelyn Jaffray, instructed by Gadens Lawyers. Max Twigg and Twigg Co are represented by O’Loughlin Westhoff.

The case is Diane Twigg & Anor v Pitcher Partners Holdings Pty Ltd & Ors.

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