Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation
[1990] FCA 426
•17 AUGUST 1990
Re: BURGUNDY ROYALE INVESTMENTS PTY. LIMITED (Receivers and Managers
Appointed) (In liquidation); THE ESPLANADE PTY LIMITED; KOTA NOMINEES PTY
LIMITED and GOLDEN GLOSS PROPERTIES LTD.
And: WESTPAC BANKING CORPORATION; THE NORTHERN TERRITORY OF AUSTRALIA; THE
NORTHERN TERRITORY DEVELOPMENT CORPORATION (now known as the TERRITORY LOANS
MANAGEMENT CORPORATION); CORPORATION OF THE CITY OF DARWIN; MURLARLI PTY
LIMITED and ORS; BEAUFORT INTERNATIONAL HOTELS; GALVESTON INVESTMENT LTD;
DATUK WONG CHIK LIM; TAN SRI WEE BOON PING; FRANCIS LEE and BAKER and McKENZIE
SOLICITORS
No. G339 of 1987
FED No. 426
Appeals
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)
CATCHWORDS
Appeals - Practice and procedure - whether orders final or interlocutory - whether leave to appeal ought to be granted.
HEARING
SYDNEY
#DATE 17:8:1990
ORDER
Grant leave to appeal.
Costs of the application for leave to appeal to be costs in the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This application for leave to appeal from orders made by a Judge of the Court arises in the following circumstances. On 17 May 1990 a subpoena for the production of documents addressed to Baker and McKenzie ("Bakers") solicitors, was issued at the request of the first respondent in the principal proceeding. Bakers had previously acted for the applicants in the principal proceedings. When the subpoena was called on, Bakers produced the documents ("the documents") required to the Court but objected to access being granted to the eighth and ninth cross-respondents. Subsequently, notices of motion were filed in which the eighth and ninth cross-respondents sought access and, for their part, Bakers sought an order refusing that access. The parties to the motions then filed evidence on the question whether Bakers could sustain as against the eighth cross-respondent a general retaining lien in respect of the documents. Bakers did not seek, in their evidence, to assert a lien as against the ninth cross-respondent. However, Bakers objected to his having access on the ground that he had retained the same solicitors and counsel as the eighth cross-respondent.
The motion came before the Judge for hearing on 22 June 1990. The parties then indicated to the Judge that there appeared to be some conflict in the evidence appearing in the affidavits filed on the questions, inter alia, whether the eighth cross-respondent had retained Bakers or had undertaken to pay their fees, even if no formal retainer existed. Senior counsel for both parties then proposed that the motions be dealt with on the following footing: (1) It should be noted that both sides accepted that there were disputed questions of fact which could take some time to resolve. (2) In the interests of possibly saving time and costs, the Court should first determine the following preliminary question: assuming for the purposes of the motions only, that the evidence adduced on behalf of Bakers be accepted, did Bakers have a general retaining lien in respect of the documents, which lien was enforceable as against the eighth cross-respondent?
The Judge acceded to the proposal that the motions proceed in this way. Accordingly, although all parties read their affidavits, there was no cross-examination of any deponent. His Honour heard submissions and reserved his decision.
On 12 July 1990, the Judge published his reasons for judgment. In his reasons, the Judge said (at p 6):
"This matter was argued in effect as a demurrer, viz. that on no presentation of the case for Baker and McKenzie, could the lien be held to subsist because on no view of the evidence was Wong a client of Baker and McKenzie and a solicitor's lien only operates qua clients The evidence presented on this issue by Baker and McKenzie must therefore be accepted as prima facie true. By very sensible agreement between the parties to facilitate an early hearing and determination of the matter, this evidence was not subjected to cross examination and at least for present purposes, available objections to its admissibility were substantially waived."
After referring to the evidence and the legal arguments put on behalf of the parties, his Honour said (at p 12):
"In my judgment, Baker and McKenzie's lien extends in principle to withholding the documents from Wong while the subject fees remain unpaid. However, the question arises whether the result should follow that the documents now produced to the Court under subpoena should be withheld from Wong in the exercise of the Court's inherent jurisdiction and discretion in relation to the conduct of the case and if not, whether conditions should be imposed."
After dealing with the question of discretion, his Honour said (at pp 15-18):
"In due course, I shall make formal orders, declarations and directions to give effect to the following decisions:
1. The lien is upheld or enforced on the following
conditions:
(a) that Baker and McKenzie file and serve a draft of their proposed claim for fees against Wong by not later than 4 p.m. on Thursday July 19
(b) that Baker and McKenzie lodge a bill for taxation of the costs allegedly payable by Wong by not later than Wednesday August 8 1990 and seeks the earliest possible appointment for taxation
(c) that in the event that the taxed costs are not paid within 28 days of certification, Baker and McKenzie commence action against Wong and any other appropriate parties for their recovery
(d) that Baker and McKenzie prosecute such action with all due diligence and expedition
2. In the meantime, access to the documents is granted
to senior and junior counsel and the particular members of the firm of solicitors acting for Wong and Wee.
3. During such access copying of the documents is
permitted for the purpose only of counsel's briefs on hearing.
4. No document is to be shown or its contents
disclosed to Wong personally, and necessary documents only are to be disclosed to but not copied for Wee for the obtaining of necessary instructions only, until the following conditions have been met.
(a) That Wong bring into court and lodge with the Registrar or deposit in another mutually agreed interest bearing account the sum of $200,000
(b) That any such account be in the joint names of the solicitor for Wong and the partner at Baker and McKenzie having charge of this matter or, if the parties agree, in the name of a 3rd party
(c) Adequate security to the same value may be substituted for the cash deposit
(d) That Wong by his solicitor agree that such deposit or security abide the taxation of Baker and McKenzie's costs and action to enforce its result, and orders concerning the ultimate fate of any accrued interest if cash is deposited.
5. I direct that by not later than 4 p.m. on Thursday
July 26, Wong file and serve a draft of his proposed defence to Baker and McKenzie's draft claim for unpaid fees.
6. Costs of Baker and McKenzie's application for
recognition of the lien are reserved to the trial where the relevance of the documents and the significance of this dispute to the action will be determined.
7. Liberty to apply on 48 hours notice on or after
July 26 to my associate or to Foster J if available or another Judge of the Court between July 13 and 25." Finally, his Honour made these orders (at p 18):
"The parties are to bring in minutes of appropriate declarations, orders and directions to give effect to these orders and directions at 9.30 a.m. on July 30 1990."
On 30 July 1990, there was argument as to the form of the orders to be made. It appears that on this occasion there was some discussion of the question whether it was appropriate, at that stage, for the Court to make an order that the claim by Bakers for a general retaining lien be upheld. His Honour then made the following orders:
1. The claim by Baker and McKenzie for a general retaining lien be upheld on the following conditions:
(a) that Baker and McKenzie file and serve a draft of their proposed claim for fees against the Eighth Cross-Respondent by not later than 4.00pm on Thursday, 19 July 1990;
(b) that Baker and McKenzie file a bill for taxation of the costs allegedly payable by the Eighth Cross-Respondent
by not later than Wednesday, 8 August 1990 and seek the earliest possible appointment for taxation;
(c) that in the event that the taxed costs are not paid within 28 days of certification, Baker and McKenzie commence action against the Eighth Cross-Respondent and any other appropriate parties for the recovery of the taxed costs;
(d) that Baker and McKenzie prosecute its action against the Eighth Cross-Respondent and any other appropriate parties for the recovery of the taxed costs with all due diligence and expedition.
2. The application by the Eighth and Ninth Cross-Respondents
for access to the documents subpoenaed from Baker and McKenzie be refused save for the following:
(a) that access to the documents subpoenaed from Baker and McKenzie be permitted to senior and junior counsel and partners, solicitors and clerks of the solicitors for the Eighth and Ninth Cross-Respondents provided they are actually engaged in the proceedings on behalf of the Eighth and Ninth Cross-Respondents;
(b) that copying of the documents subpoenaed from Baker and McKenzie be permitted provided that such copying is for the sole purpose of including such copies in counsels' briefs on hearing and files of Blake Dawson Waldron for the purposes of the hearing;
(c) the contents of documents may be shown to but not be copied for the Ninth Cross-Respondent and may be shown to and independently translated for this purpose.
3. Nothing in these orders should be taken as
preventing the legal representatives of the Eighth and Ninth Cross-Respondents from obtaining instructions and information from any witnesses for the Eighth and Ninth Cross-Respondents as to the existence, content or ownership of the documents provided that the documents themselves are not shown or disclosed to these witnesses.
4. Unless and until:
(a) the Eighth Cross-Respondent provides security in the sum of $200,000 by:
(i) bringing into Court and lodging with the Registrar the said sum of $200,000;
(ii) depositing the said sum of $200,000 in an interest bearing deposit account acceptable to Baker and McKenzie and the Eighth Cross-Respondent such account to be in the joint names of David Blessington and John McDarra or in the name of a third party acceptable to Baker and McKenzie and the Eighth Cross-Respondent; or
(iii) providing adequate security to the same value in lieu of a cash deposit of $200,000; and
(b) the Eighth Cross-Respondent by his solicitor agrees that such deposit or security and any interest thereon abide any determination by the Court that:
(i) the Eighth Cross-Respondent is liable to pay fees claimed by Baker and McKenzie; and
(ii) those fees as taxed exceed the sums paid to Baker and McKenzie in respect of their fees in acting on behalf of the Applicants;
no document is to be shown nor the contents of any document disclosed to the Eighth Cross-Respondent.
5. The Eighth Cross-Respondent file and serve a draft
of his proposed defence to the draft claim by Baker and McKenzie for unpaid fees by not later than 4.00pm Thursday, 26 July 1990.
6. Costs of Baker and McKenzie's application for recognition of the
lien be reserved to the trial where the relevance of the documents and the significance of this dispute to the action will be determined.
7. Liberty to apply on 48 hours notice including in
respect of any documents in a particular category."
The eighth and ninth cross-respondents now seek leave to appeal from these orders. If leave is granted, the grounds of appeal and orders sought on the appeal are stated in their draft amended notice of appeal as follows:
"...Grounds:
His Honour erred:
1. In holding that Baker and McKenzie's lien extended in
principle to withholding the documents from Wong while the subject fees remain unpaid.
2. In finding that Wong was a client of Baker and
McKenzie.
3. In finding that Wong was the debtor for Baker and
McKenzie's fees.
5. In finding that the fate of the applicant
companies' documents would have been determined by Wong or by people acting for him and at his direction, to a significant extent at least, in his private capacity.
6. In finding that two people may possess the same
document at the same time.
7. In finding that Wong had a concurrent right to the
documents.
8. In lifting the corporate veil in the circumstances
of the case....
9. In holding that exposing the documents to Wee and
his lawyers without safeguards would defeat the lien.
In imposing upon the appellants any of the
conditions on access to, copying of and disclosure of the documents.
In determining more than the preliminary point of
law that the parties presented for his decision, that preliminary point of law being whether a general retaining lien was enforceable against the debtor for Baker and McKenzie's fees.
ORDERS SOUGHT:
1. The appeal be allowed. 2. A declaration that Baker and McKenzie are not
entitled to enforce against the appellants a general possessory lien over the documents in respect of their unpaid costs.
3. That the appellants are entitled to have access,
subject to privilege to the documents produced by Baker and McKenzie in answer to a subpoena issued at the request of the Westpac Banking Corporation Limited.
4. Costs."
Is leave to appeal necessary?
By s.24(1A) of the Federal Court of Australia Act 1976, leave to appeal is required in the case of a judgment that is interlocutory.
In Computer Edge Pty. Ltd. v. Apple Computer Inc. (1984) 54 ALR 767, in upholding an objection to competency, Gibbs C.J. said (at pp 767-8):
"What is plain is that the judgment of that court comprised two orders which, viewed by themselves and apart from the rest of the judgment, were final orders, and one order which was plainly interlocutory. The result of the judgment as a whole was that some of the questions in issue in the case were determined and others were not. The question then is whether a judgment of that kind is a final judgment within the meaning of s.33(4) of the Federal Court of Australia Act, and s.35(3) of the Judiciary Act as they stood at the material time. The test for determining whether a judgment is final, which has been laid down in a number of cases including Carr v. Finance Corporation of Australia Ltd. (No. 1)..., is whether the judgment finally determines the rights of the parties, and the authorities have held that the court in applying the test must have regard to the legal rather than the practical effect of the judgment. So that the question in the present case is whether the whole judgment finally determined, in a legal sense, all the rights of the parties that were at issue in these proceedings. And the answer is, plainly, that it did not, because it left undetermined the question whether any, and what, damages were payable. The conclusion that the judgment is not a final judgment is supported by a short passage from the judgment of Dixon CJ in John Grant and Sons Ltd v. Trocadero Building and Investment Co. Ltd. (1938) 60 CLR 1 at 35, where his Honour said:-
'The judgment of the Supreme Court did not determine the action, for the demurrers did not affect pleas to or replications in relation to all counts of the declaration. The judgment was, therefore, interlocutory, and this appeal did not lie, without leave.'"
There is a question whether the first order made by his Honour, which was in the nature of a declaration of right, is final or interlocutory. On the one hand, the context in which the motions were dealt with was interlocutory. On the other hand, the order as to Baker's entitlement to a lien is final in form. But even if it be assumed that this order was final, it is clear that the other orders and directions were interlocutory. That being so, in accordance with the reasoning in Computer Edge, it must follow that the judgment, taken as a whole, is interlocutory. It further follows that leave is required.
Should leave be granted?In my opinion, leave ought to be granted.
It is true that it is arguable that the first order made by the Judge was interlocutory only, and not final. If it was interlocutory, it could be reviewed, and, if appropriate, varied or discharged by the Judge, or another Judge, without any appeal being brought (see, e.g. Commissioner of Federal Police v. Cox (1986) 70 ALR 509 at pp 510, 519). However, it is at least arguable that the order in question was expressed as a final order, consistently with the reasoning adopted by his Honour. The Judge seems to have approached the matter on the footing that it was his duty to resolve finally the issue of the retainer of Bakers by the eighth cross-respondent. In his reasons, the Judge did not address the issue for determination on the basis merely of a serious question to be tried. The first order is not expressed to be made until further order and no undertaking as to damages was sought. All these considerations point to the conclusion that, although the parties proposed a more limited inquiry, his Honour decided to resolve the issue of retainer once and for all.
If this is an accurate description of the events, (and I need not, and do not, express an opinion on the question) there is at least an arguable prospect that an appeal would succeed. In all the circumstances, it is appropriate to grant leave to appeal.
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