ASIC v Infomercial Management Group Pty Ltd

[2001] VSC 268

SUPREME COURT OF VICTORIA
AT MELBOURNE	Not Restricted

COMMERCIAL AND EQUITY DIVISION
CORPORATIONS LIST

No. 5010 of 2000
No. 5009 of 2000
No. 5008 of 2000

IN THE MATTER of the CORPORATIONS LAW OF VICTORIA

IN THE MATTER of the 1997 Infomercial Product Distribution Investment Scheme, Infomercial Management Group Pty. Ltd. (ACN 073 859 579) and Others

IN THE MATTER of the 1998 Infomercial Product Distribution Investment Scheme, Infomercial Management Group Pty. Ltd. (ACN 073 859 579) and Others

IN THE MATTER of the 1999 Theme Based Music Collaboration Scheme, IP Product Management Group Pty. Ltd. (ACN 085 083 834) and Others

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v.
INFOMERCIAL MANAGEMENT GROUP PTY. LTD. AND OTHERS	Defendants

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JUDGE:	HARPER, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15 JUNE 2001
DATE OF RULING:	15 JUNE 2001
CASE MAY BE CITED AS:	ASIC v. INFOMERCIAL MANAGEMENT GROUP PTY. LTD. & ORS.
MEDIUM NEUTRAL CITATION:	[2001] VSC 268

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CATCHWORDS:      Commercial cause – Application by defendants to vacate trial date – Senior counsel appearing in long running case elsewhere – Unusual circumstances – Whether sufficient time for preparation – Whether fresh counsel should be engaged – Impact of vacation of trial date on operation of Court lists – Prejudice to opposite parties – Application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. J. Beach QC with Mr. D. Star	ASIC
For the Defendants	Mr. D. Habersberger QC with Mr. L. Watts	Strauss & Associates

HIS HONOUR:

1. This is an application for the vacation of a trial date which on 15 December last year was fixed for 30 July this year.

1. The application is supported by an affidavit sworn by the solicitor for the first, third, fifth, sixth, seventh and ninth defendants on whose behalf the application is made.  That affidavit discloses that senior counsel presently engaged for the defendants, Mr Beaumont QC, is currently involved in a case before Smith J in this court which commenced on 1 February 2001 and is continuing. 

1. When the case commenced it was, according to Mr Strauss's evidence, estimated to occupy six weeks at trial.  In fact it will occupy, it seems, very close to six months.  Mr Beaumont's availability for a trial to commence on 30 July is thereby put in jeopardy. 

1. It has been submitted by Mr Habersberger QC for the defendants that this fact, together with others, forms a proper basis for the success of the application.  According to the evidence of Mr Strauss, some $300,000 has already been spent by the defendants in senior counsel's fees in relation to the various pieces of litigation with which the defendants are involved. 

1. I accept that some of that money would be thrown away were Mr Beaumont not able to appear for the defendants on 30 July.  I also accept that Mr Beaumont has a knowledge of this litigation which is of value to the defendants and which would not readily be replicated within the time allowed between the briefing of fresh senior counsel, were that to take place in the very near future, and the trial date. 

1. I note, nevertheless, that Mr Beaumont had set aside between four to six weeks for preparation for the trial and that those costs have not yet been incurred although the defendants, I am no doubt expected to accept and do accept, budgeted to spend an appropriate amount on this aspect of the litigation. 

1. As Mr Beach QC for the plaintiff has pointed out, those moneys remain available for preparation expenses no matter who is the counsel involved in that preparation.  To that extent, therefore, the engagement of fresh counsel would not financially disadvantage the defendants. 

1. Mr Habersberger submits that the defendants would necessarily be disadvantaged were new senior counsel to be briefed because such counsel could not within the time available accumulate a familiarity with the case currently enjoyed by Mr Beaumont, particularly in relation to the accounting evidence which it is anticipated will be tendered at the trial. 

1. Mr Habersberger points to the fact that the defendants have filed no notices pursuant to Order 44 of the Rules of the Supreme Court as supporting the proposition that the role of senior counsel in relation to accounting matters is likely to be crucial in that counsel will be expected to cross-examine the witnesses called by the plaintiff in relation to the accounting matters in dispute and that it will be upon that cross-examination rather than their own expert evidence that the defendants will rely in support of whatever propositions they seek to make in relation to that aspect of the case.

1. Mr Habersberger further submitted that it was through no fault of the defendants that they find themselves in their present position, i.e. of having to make an application at this stage for a vacation of the trial date.

1. I do not accept that the defendants have done all they could have done to avoid the present situation.  In my opinion, it should have been plain by the beginning of May at the latest that Mr Beaumont might not be able to complete his commitment to his current trial in time to enable him to prepare for the case in the way which he initially anticipated.

1. I am also concerned that, as is apparently the case, Mr Beaumont and Mr Beaumont alone is the repository of all the defendants' legal expertise in relation to accounting issues.

1. I fully accept that where more than one counsel is employed in a case it is appropriate that the tasks of preparation be allocated as between counsel with particular counsel being given particular responsibility for particular aspects of that preparation.

1. I do not accept that counsel should proceed upon the basis that one alone of several counsel should, to the exclusion of the other or others, have the sole responsibility for preparation of any particular aspect of the case.  Such an attitude is destined to produce the kind of predicament with which the court is now faced.  It is a predicament for which there is no ready solution.

1. No matter what my decision this morning, very real difficulties will arise.  I am not satisfied that the defendants have done what they could have done to avoid placing the court and, therefore, the administration of justice, in that difficult position.

1. In making those points, I do not discount the importance to the individual client of retaining counsel that have been retained over a long period in relation to litigation.  I fully appreciate the need, where possible, to provide litigants with continuity of legal advice.  That consideration must necessarily, however, from time to time give way to the imperatives of the proper administration of justice and it seems to me that this case runs very close to those in which it is proper that fresh counsel be employed.

1. There is, on the other hand, the consideration that, even given a further six weeks between this day and the date fixed for commencement of trial, senior counsel will have difficulty in mastering the brief to the extent necessary to properly assist the court in the resolution of the issues which will then be before the court.

1. I accept Mr Habersberger's submission that fresh counsel will require all of the time available and more in order to properly master the voluminous material which such counsel would be expected to be familiar with by the time the case begins.

1. It was submitted by Mr Beach that, given the time still available before the commencement date of trial, the exercise would be one that could be adequately completed by competent counsel.  It is easy for a judge to forget the difficulties of preparation for trial and I am conscious of the need to view with reality the circumstances which counsel face in preparation.  It is easy to forget when one is removed from the stresses of trial preparation all the demands which such preparation involve, particularly for a difficult piece of litigation.

1. I am mindful of the fact that if the trial date is vacated no new date can presently be fixed.  I am also mindful of the fact that as a result there can be no guarantee that any counsel will be available for the fresh trial date.  It follows that when the fresh trial date is fixed the plaintiff might find itself in the position in which the defendants now find themselves.  Indeed, it may be that once again the defendants are faced with the necessity to look to the possibility of engaging different counsel.  The court, in turn, will have to juggle its own timetable and its own resources, resources which were committed to a trial on 30 July, in order to accommodate the new circumstances.

1. I have, I think, said enough to demonstrate that the position in which I presently find myself is one of extreme delicacy.  There is no right answer.

1. Giving as full a consideration as I can to all the matters put to me by both counsel this morning and having carefully read the affidavit of Mr Strauss, it seems to me that on balance I should allow the application.  I do so, as will be plain, with great reluctance.  I do so cognisant of the danger that, although my decision will not serve as a formal precedent, it might be taken by the Bar generally, because these matters are discussed, as an invitation to counsel to so manage things as to force the court to accommodate the particular ends of a particular litigant.  Such circumstances, were they to obtain, would damage very severely one of the great traditions of the Bar:  and that is that it be prepared to provide counsel to cover other counsel who become unavailable.

1. The fact is that where large litigation looms all legal advisers involved must be acutely aware of the danger that those involved may be jammed in other proceedings;  and where that danger becomes real, as I think it did in about May, if not earlier this year in relation to Mr Beaumont's present case, steps need to be taken to alleviate or remove the difficulty.

1. Despite the fact that in my opinion the defendants did not do all that should have been done to avoid the present situation, I think the larger danger is that injustice will be compounded if the trial date is retained.  For these reasons I will allow the application.

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