FEDERAL COURT OF AUSTRALIA
BQC23 v BQS23 [2023] FCA 889
File number: VID 314 of 2023 Judgment of: RARES J Date of judgment: 28 June 2023 Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal from refusal to grant injunction restraining solicitors and counsel from continuing to act in main proceeding for remaining clients after applicant terminated joint retainer – where primary judge’s reasons not published to prevent disclosure of information subject to legal professional privilege – where applicant sought to raise new argument not put to primary judge – whether decision of primary judge attended by sufficient doubt to warrant grant of leave – whether substantial injustice would result if leave to appeal refused – held: application dismissed. Cases cited: Bienstein v Bienstein (2003) 195 ALR 225
Coulton v Holcombe (1986) 162 CLR 1
Maguire v Makaronis (1997) 188 CLR 449
Pilmer v The Duke Group Limited (in liquidation) (2001) 207 CLR 165
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 43 Date of hearing: 28 June 2023 Counsel for the applicant: Mr J Levine Solicitor for the applicant: Matrix Legal Counsel for the respondents: Mr A Kirby Solicitor for the respondents: DW Fox Tucker Lawyers ORDERS
VID 314 of 2023 BETWEEN: BQC23
Applicant
AND: BQS23
Respondent
BQR23
Respondent
BQQ23
Respondent
ORDER MADE BY:
RARES J
DATE OF ORDER:
28 JUNE 2023
THE COURT ORDERS THAT:
1.The application for leave to appeal be dismissed.
2.The applicant pay the respondents’ costs.
3.Until further order by the docket judge in the principal proceeding or another judge:
(a)each of the parties to this proceeding be identified by a pseudonym; and
(b)the names of each party, evidence, submissions and transcript in the application for leave to appeal be suppressed and not published other than to the parties to this proceeding or their lawyers,
on the ground that this order is necessary to prevent prejudice to the proper administration of justice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from the transcript)RARES J:
INTRODUCTION
BQC23, one of the applicants in the main proceeding, seeks leave to appeal from a decision of a judge of the Court refusing to grant an injunction restraining the solicitors and counsel (the lawyers) who previously acted for all of the applicants below (collectively, the clients) against a number of separately represented respondents (the promoters) over an investment proposition that appears to have failed. Mr R was the principal of BQC23.
The original draft notice of appeal contained 37 grounds, but after a case management hearing, the revised draft has now reduced to 25 grounds. Those grounds are still vague and general, but raise three separate substantive bases on which BQC23 asserts that his Honour erred in not enjoining the lawyers from continuing to act for all the other applicants (collectively, the investors) in the proceeding namely…
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- AGLC
- BQC23 v BQS23 [2023] FCA 889
- Case
- [2023] FCA 889
- Decision Date
CaseChat Overview and Summary
The court ordered that the application for leave to appeal be dismissed, that BQC23 pay the respondents’ costs, and that the parties, evidence, submissions, and transcript in the application for leave to appeal be suppressed and not published other than to the parties or their lawyers. This was to prevent prejudice to the proper administration of justice.
Orders
Orders of the court
1. The application for leave to appeal be dismissed.
2. The applicant pay the respondents’ costs.
3. Until further order by the docket judge in the principal proceeding or another judge:
(a) each of the parties to this proceeding be identified by a pseudonym; and
(b) the names of each party, evidence, submissions and transcript in the application for leave to appeal be suppressed and not published other than to the parties to this proceeding or their lawyers,
on the ground that this order is necessary to prevent prejudice to the proper administration of justice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
The primary judge found that the effect of BQC23’s delay on the cost, inconvenience and impracticality of requiring the lawyers to cease to act for the investors was considerable and that to grant BQC23 the relief sought would occasion further substantial delay in listing the main proceeding for trial. That was because of the need for the investors to obtain new solicitors and counsel, and for them to familiarise themselves with the matter. The main proceeding, by then, had been on foot for many years. His Honour found that such an additional delay provided a further basis to conclude that, were BQC23 separately represented in the main proceeding, the lawyers should not be restrained from continuing to act for the investors because of any alleged real or substantial possibility of a conflict of interest or duty that arose because they had acted in the past for BQC23.THE DUTY OF LOYALTY AND ADMINISTRATION OF JUSTICE ARGUMENTS His Honour then discussed the conflict in the authorities as to whether a lawyer had a duty of loyalty that provided a basis on which to grant an injunction against the lawyers continuing to act for the investors. He noted that single judges of this Court and some appellate courts had found that no duty of loyalty existed, whereas other courts had found, in Australia and elsewhere, that there was such a duty. In any event, the primary judge said that, even if he were to have found that such a duty of loyalty applied in respect of BQC23, he would have exercised his discretion against the grant of any injunction restraining the lawyers from continuing to act for the investors for the same discretionary reasons that he had given for refusing to enjoin them based on the alleged conflict of interest. His Honour also rejected the third basis on which BQC23 relied, namely that in an appropriate, but exceptional, case the Court had an inherent jurisdiction to restrain lawyers from acting for a client if to do so would be contrary to the proper administration of justice. His Honour discussed the authorities, but found that the difficulty with accepting BQC23’s submissions was, again, the fact that there was no cross-claim on foot between BQC23 and BQQ23 nor any prospect of one. Accordingly, he found that there was no active factual issue on the clients’ pleadings as to anyone other than the promoters having caused BQC23 to invest and that, as matters presently stood, it was difficult to see why the lawyers would have any occasion to contradict Mr R’s evidence on this point if he repeated at the trial the evidence that he had given on the injunction application. His Honour found it difficult to see how the investors could be allowed to cross-examine Mr R on any such evidence or how BQC23’s lawyers could be allowed to cross-examine the investors’ witnesses (including BQQ23). In those circumstances, his Honour found that a reasonably informed, fair-minded member of the public could not conclude that, having acted for the clients for many years, the lawyers should be now restrained from continuing to act for the investors.