3GS Holdings Pty Limited v Notaras
[2008] NSWADT 70
•5 March 2008
CITATION: 3GS Holdings Pty Limited v Notaras and ors [2008] NSWADT 70
This decision has been amended. Please see the end of the decision for a list of the amendments.DIVISION: Retail Leases Division PARTIES: APPLICANT
3GS Holdings Pty LimitedFIRST RESPONDENT
Irene NotarasSECOND RESPONDENT
John K Newton & Co Pty LimitedTHIRD RESPONDENT
FOURTH RESPONDENT
Zamojazz Pty Limited
Jamojazz Pty LtdFILE NUMBER: 075156 HEARING DATES: 30 January 2008 SUBMISSIONS CLOSED: 30 January 2008
DATE OF DECISION:
5 March 2008BEFORE: Fox R - Judicial Member CATCHWORDS: Interim order MATTER FOR DECISION: Preliminary matter LEGISLATION CITED: Administrative Decision Tribunal Act 1997
Retail Leases Act 1994CASES CITED: Bowen v Stott [2004] WASC95
Helou v Bong Bong Investments Pty Limited [2006] NSWADT 128
Jackson v Sterling Industries Limited (1987) 162CLR 612
Kallinicos & Anor v Hunt & Ors [2005] NSWSC 1181
Phillip Morris Inc v Adam P. Brown Male Fashions Pty Limited [1981] 48CLR
Prince Jefri Bolkiah v KPMG [1998] UKHL 52; [1999] 2AC222REPRESENTATION: APPLICANT
RESPONDENTS
J Keogh, barrister
P Walsh, barristerORDERS: 1. That David Anthony Sunman cease to act for the Respondent
2. Costs of this application reserved.
REASONS FOR DECISION
1 The Applicant (who claims as Lessee) has made interlocutory application for an order that the Respondents’ solicitor, Mr Sunman cease to act for it. The application is said to be based on Solicitors Practice Rule No. 19:
2 The matter before me arises out of evidence either given or likely to be given by Mr Sunman. Dr Keogh identified three particular items, which were alleged to be so material to the matter, which will be in issue in the substantive hearing, that it was extremely likely that Mr Sunman would be examined on those matters. Two arise out of Mr Sunman’s Affidavit sworn 29 August 2007 and filed in the proceedings, and the third arises out of matter raised before me on the first occasion when the matter came to this Tribunal, in an Application for Urgent Interim Relief on the next day.
“A practitioner must not appear as an advocate and, unless there are exceptional circumstances justifying the practitioner’s continuing retainer by the practitioner’s client, the practitioner must not act, or continue to act, in a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence material to the determination of contested issues before the court.”
3 The first matter identified is a conversation between Mr Osborne, solicitor for the former Lessee and Mr Sunman about preliminary requirements for the grant of a sublease to the Applicant. The second is a conversation between Mr Manos, Director of the Applicant, and Mr Sunman. The third is a request allegedly made by Mr Sunman to the Applicant that a sublease document be signed.
4 It is fair to say that Mr Walsh, on behalf of the Respondent, conceded in argument that at least the second issue was likely to involve a matter which was material within the meaning of Rule 19, and (more relevantly) within the meaning of what might best be called the rule in Kallinicos & Anor v Hunt & Ors [2005] NSWSC 1181 (Brereton J). I make this distinction because I accept Mr Walsh’s preliminary proposition to the effect that I have no jurisdiction at all to enforce Rule 19. The Rule is a conduct stricture for legal practitioners, and the enforcement of that is the business of another division of this Tribunal, at the behest of the Legal Services Commissioner or the Council of the Law Society. If Rule 19 is relevant at all, it is only so as a guide to what is proper conduct in this Tribunal for a legal practitioner. In this regard I note that most of the decision in Kallinicos (in so far as it is relevant to these present proceedings) amounted to a discussion of a common law rule, and there is only a passing reference (paragraph 87) to Rule 19.
5 What I have described as the Rule in Kallinicos is stated in paragraph 76 of the decision:
6 The question to be asked is:
“However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice. The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. The jurisdiction is to be regarded as exceptional and is to be exercised with caution. Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.”
7 In the particular circumstances of Kallinicos case, Brereton J concluded at paragraph 84:
“Would the solicitor, in giving evidence, be placed in a situation where his duty to his client, (and perhaps his personal interest in the outcome) is in conflict with his duty to the Court as an officer of the Court?” Brereton J quotes with approval the following observations by Hasluck J in Bowen v Stott [2004] WASC95 :
“His Honour added observations to the effect that the exercise of the power must be regarded as exceptional; that it was generally undesirable for a practitioner aware that he was likely to be called as a witness other than in relation to formal or non-contentious issues to continue to represent the client; that a clear case should be required that the practitioner in question is fixed with an interest conflicting with his duty to the court, but that if a practitioner’s credibility is at stake as a witness so that his or her personal integrity may be put in issue, that may constitute a personal interest inconsistent with the practitioner’s duty to the court or to the client; and that the cost, inconvenience or even impracticality of a firm ceasing to act may provide a reason for refusing to grant relief, due weight being required to be given the public interest that a litigant should not without good cause be deprived of his or her choice of counsel.”
“…The most obvious case in that regard would be a situation in which a solicitor had some direct pecuniary interest in the outcome. It might seem to an independent observer that a solicitor, notwithstanding his best efforts to be impartial and objective, might adjust his evidence in some way to procure a result that suited his interest. The decided cases suggest also that the same principles apply in circumstances where a solicitor might feel impelled to justify or defend his conduct in representing a client, notwithstanding that the solicitor did not have any specific pecuniary interest in the outcome other than the obtaining of his professional fees.”
8 Although Mr Walsh conceded that Mr Sunman’s evidence might be material, I did not take his concession to mean that the matters raised by Dr Keogh were material on issues of substance .
“Accordingly, in my opinion, Mr Moloney will be a material witness on issues of substance which appear to be controversial and in respect of which questions of credibility and integrity (not necessarily his own) are likely to arise.” (emphasis supplied)
9 Mr Walsh argued that the inherent jurisdiction identified in the many cases quoted by Brereton J are all (in NSW at least) decisions by Courts of Record, which have an inherent jurisdiction, as opposed to statutory tribunals such as the Administrative Decisions Tribunal. This particular aspect, in oral argument, was put on the basis that there are simply no reported decisions of such power being exercised (or refused to be exercised) by any other than Courts of Record. This resulted in the proposition that, if I did agree with Dr Keogh’s argument that Mr Sunman’s evidence was likely to fall foul of the test formulated in Kallinicos then I would have to adjourn the proceedings to allow the Applicant to approach the Supreme Court for an order enjoining Mr Sunman from continuing to act for the Respondent in these proceedings.
10 Such an awkward process seems to me to run counter to the stated objects of the Tribunal as found in section 3(b) and (c) of the Administrative Decisions Tribunal Act 1997:
“(b) to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair,
(c) to enable proceedings before the Tribunal to be determined in an informal and expeditious manner.”
In the absence of a specific direction (such as is found in section 131 of the Administrative Tribunals Act 1997 in relation to the power to punish for contempt) I do not accept that I have to take that course.
11 In his written submissions, Mr Walsh put the matter a little differently:
“The Tribunal, being created by statute and not being a superior court does not have any inherent jurisdiction. The Tribunal has only those powers as are:
a. Expressly conferred by statute:
b. Impliedly conferred by statute; or
c. Incidental and necessary to the exercise of the jurisdiction or powers so conferred.”
12 Mr Walsh then referred me to the various decisions examining the position of the Federal Court of Australia that being a Court created by statute. I will refer to those decisions later on in these Reasons.
13 Dr Keogh responded by pointing out that the matter before me is, in truth, an interlocutory matter, and then he referred me to section 24A of the Administrative Decisions Tribunal Act 1997 which, as far as relevant, states:
“(1) In this section:
"interlocutory function" means the making of any order or other decision by the Tribunal (including an Appeal Panel of the Tribunal) in proceedings in respect of any of the following:
(a) stays or adjournments,
(b) Prohibition or restriction of the disclosure, broadcast or publication of matters by order under section 75,
(c) summonses,
(d) extensions of time for any matter (including for the lodgment of applications or appeals),
(e) evidential matters,
(f) disqualification of members,
(g) joinder of parties to proceedings,
(h) summary dismissal of proceedings,
(i) any other interlocutory issue before the Tribunal.
. . .
(4) This section has effect despite any other requirement of this Act or any other enactment relating to the constitution of the Tribunal for the exercise of its functions.”
14 It seems to me that the matter raised before me, relating as it does to the integrity of the evidence which might be given by Mr Sunman, is an evidential matter, and that it follows that section 24A gives me power to consider it. The section does not create jurisdiction, it simply identifies certain aspects, which are interlocutory, and then allocates how they may be treated by the Tribunal. However the plain underlying assumption of the section is that the Tribunal has power to regulate its own evidential matters.
15 Mr Walsh developed the argument that, because section 73(1) of the Administrative Decisions Tribunal Act 1997 states:
“The Tribunal may, subject to this Act and the rules of the Tribunal, determine its own procedure.”
and because no rules have been made in relation to the matter now at hand, there was no jurisdiction. However subsection 1 is plainly “subject to this Act” and that of course brings section 24A back into play.
16 Section 24A, reading its plain words, defines what is an interlocutory function and then goes on to indicate how those interlocutory functions may be exercised by the Tribunal as variously constituted. That, of itself, seems to me to be sufficient to empower me to make the orders, which Dr Keogh seeks.
17 If I be wrong in that assessment, then I note there to be several further bases upon which it might be said that I have jurisdiction.
18 It was raised in argument, although not fully resolved in any way, that the Retail Leases Division of the Administrative Decisions Tribunal is different to other divisions in relation to those who may appear before it. Section 71 of the Administrative Decisions Tribunal Act 1997 renders the right of appearance of an agent of a party subject to the discretion of the Tribunal. Section 77C of the Retail Leases Act 1994 provides:
“(1) In any proceedings before the Tribunal, the parties to the proceedings may appear in person or may be represented by a lawyer or other agent.
(2) This section applies despite the provisions of section 71 of the Administrative Decisions Tribunal Act 1997.”
The effect is, obviously to remove from the Tribunal, as constituted by me, the discretion to order that a party not be represented by a lawyer. Differently stated:- Section 77C creates a right of appearance of a lawyer in the Retail Leases Division.
19 As I have indicated, this aspect of the matter was not fully argued, but it seems to me to be the case that, if a lawyer has a right of audience in a Tribunal, then that right must be circumscribed by all the obligations which are said to apply to such persons whether in Courts of Record which are acknowledged to have the relevant inherent jurisdiction or in lesser courts and Tribunals which are generally accepted to have the power to regulate those who appear before it as officers of that Court or Tribunal. Kallinicos demonstrates that one of those powers is the power, in the interests of the administration of justice, to prevent a lawyer representing a party, if that lawyer is to give evidence, which is substantially material.
20 Yet another basis upon which the matter might be considered is in terms of the comment made by Aickin J in Phillip Morris Inc v Adam P. Brown Male Fashions Pty Limited [1981] 48CLR at 535 (and quoted with approval by Wilson and Dawson JJ in Jackson v Sterling Industries Limited (1987) 162CLR 612)
:
- “No doubt the vesting of judicial power in specified matters within section 75 and 76 in a Federal Court created by the parliament will carry with it such implied powers as are necessarily inherent in the nature of judicial power itself. At least in the case of a superior Court of Record, the grant would carry with it, for example, a power to punish for contempt.”
21 It seems to me that Aickin J is referring to judicial power generally, and not the specific judicial power of the Commonwealth created by the Constitution. The comment can be seen to be a statement of the common sense proposition that when the legislature creates a Court or Tribunal, subject to whatever limitations or expansions are stipulated by that legislation, it must be assumed to have intended to give it the powers necessary to properly dispose of its business. These are the implied powers. An examination of Chapter 6 of the Administrative Decisions Tribunal Act 1997 and of Chapter 8 of the Retail Leases Act 1994 raises many directions about the conduct of the Tribunal in general and the Retail Leases Division in particular. For example as indicated by sections 73(2) and 73(3) the Tribunal is not bound by the rules of evidence, and may inform itself as it sees fit, subject to the rules of natural justice, it is to act as informally as possible in all of the circumstances, without regard to technicalities or legal forms, according to equity and good conscience. I have already made reference to section 131, and that is an example of a power, which is specifically not given to the Tribunal. However absent specific prohibition, these statutory directions, I am satisfied, operate in conjunction with the wider range of powers, which are implied simply from the fact of creation of the Tribunal.
22 Seen in this light, the power I am now asked to exercise is one of those, which is within the implied power of the Tribunal. It flows from the fact that the Tribunal was created a Tribunal with power to regulate its own affairs.
23 I am satisfied that I have the power to prohibit Mr Sunman from appearing if I conclude that a fair minded reasonably informed member of the public would conclude that the integrity of the judicial process, and the appearance of justice would be adversely affected by allowing him to continue to act and give evidence as well.
24 I am to resolve whether or not Mr Sunman’s evidence before the Tribunal is likely to be substantially material. I indicated earlier that Mr Walsh had virtually conceded the point but, as indicated, he only conceded that the evidence was material. The Kallinicos test asks the question whether the evidence is likely to be substantially material, and then raises the further restriction that the jurisdiction is exceptional and should be exercised with caution, and that due weight should be given to the public interest in a litigant not being deprived of a lawyer of choice.
25 The three instances raised by Dr Keogh each appear to bear on the question between the parties relating to the existence of an agreement for the occupation of the premises. The Applicant is in actual occupation of the premises. It was acknowledged in argument before me that the matter to be agitated would not be dissimilar to that which was before this Tribunal in Helou v Bong Bong Investments Pty Limited [2006] NSWADT 128. That means that whatever passed between the parties whether orally or in writing, will be very relevant indeed to establish the nature of the occupancy.
26 The Application claims that there is a lease of the premises, alleging that to be partly in writing, and partly oral and partly implied. The writing is a draft sublease submitted by the Respondent to the Applicant, and emails which passed between Mr Sunman and Mr Stocks, all before the Applicant took occupation on a day in December 2005. The Respondents’ case appears to be that there is no relevant agreement or consensus; the Applicant was a monthly tenant whose tenancy was terminated by valid notice to quit.
27 The instances of evidence to be given by Mr Sunman, as identified by Dr Keogh, relate to conversations between Mr Sunman and Mr Osborne (solicitor for the assignor to the Applicant) about the basis upon which a sublease might be given, conversations between Mr Sunman and Mr Manos, director of the Applicant, at the time of service of the notices to quit in which Mr Manos is alleged to have made a damaging admission, and evidence of attempts by Mr Sunman to obtain a signature by the Applicant to a document (which may have been the draft sublease referred to in the Application).
28 It seems to be clear that a pivotal issue will be the exact nature of the occupancy, and that will bring in that part of section 3 of the Retail Leases Act 1994 which defines a Retail Shop Lease to be:
“Any agreement under which a person grants of agrees to grant to another person for value a right of occupation of premises for the purpose of use of the premises as a retail shop:
(a) whether or not the right is a right of exclusion of occupation and;
(b) whether the agreement is expressed or implied, and
(c) whether the agreement is oral or in writing or partly oral or partly in writing.”
29 It is quite possible, as Mr Walsh suggested in oral argument, that the alleged admission by Mr Manos, in conversation with Mr Sunman, will turn out not to be of a sufficient degree of substance. That may well be so, but the cases show the approach to be taken to be prospective. I have to consider whether Mr Sunman is likely to be a material witness on issues of substance, which appear to be controversial. I am satisfied that there is a very real prospect that the words alleged to have passed between Mr Sunman and Mr Manos will have very strong bearing on a controversial issue of substance.
30 The first and third instances of Mr Sunman’s evidence seem to me to have an even clearer potential to be pivotal issues in resolving the question of what was the agreement between the parties. That being so, the primary part of the Kallinicos test has been satisfied.
31 I am mindful of the riders listed in paragraph 76 of the Kallinicos judgment but am satisfied that the circumstances of this matter are of sufficient weight for me to exercise the exceptional jurisdiction. I note that the matter is, relatively speaking, still in its early stages, and so the inconvenience to the parties flowing from the order, which I propose to make, will be minimised.
32 I am also mindful of the differences between the fact situation in Kallinicos and the matter before me. In Kallinicos the involvement of the solicitor in the dispute between two directors of the company for which the solicitor was still acting, might well be seen to be more central to the controversial issues between those parties than Mr Sunman’s involvement in the present circumstances. Notwithstanding that, I am satisfied, as I have indicated, that there is a strong potential that Mr Sunman’s evidence will be sufficiently material, and so, despite the public interest in a litigant not being deprived of the lawyer of their choice, I am satisfied that it is appropriate that Mr Sunman be prevented from acting for the Respondent.
33 To the quote Brereton J in his summary of the decision of Hasluck J in Bowen v Stott:
“if evidence were given of the kind likely to be given by the legal practitioners involved in the negotiations, a conflict of interest might arise which could interfere with the proper administration of justice, because the practitioners might not be able to conduct themselves with proper objectivity.”
34 Lastly, the question of costs of this application was not ventilated before me. In view of the interlocutory nature of the application, I will simply reserve that question.
10/03/2008 - ... on behalf of Applicant ... . (changed to) ... on behalf of Respondent ... . ... according to equity and bought conscience. (changed to) ... according to equity and good conscience. - Paragraph(s) 4 and 21
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