Cameron's Unit Services Pty Ltd v Kevin R. Whelpton & Associates (Aust) Pty Ltd

[1986] FCA 679

LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA ) )

NEW	SOUTH	WALES	DISTRICT	REGISTRY	1	No. 345 of 1986
)

DIVISION	GENERAL	)
BETWEEN :

Applicants

__ AND :

KEVIN R. WHELPTON &

ASSOCIATES (AUST.)

PTY LIMITED and KEVIN

RICHARD WHELPTON

Respondents

EX-TEMPORE REASONS FOR JUDGMENT

BURCHETT J.

In this matter, the respondents seek an order that the

proceedings be stayed pending final determination of an

application for an order of review in proceedings No. G.535 of

1986. The review proceedings relate to a grant of legal aid to the applicants under s.170 of the Trade Practices Act 1974.

The matter has a long history, which I have already

discussed in the judgment which I delivered on 2 4 September last,

upon a previous application for a stay, and for security for

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costs. In that application, the stay was sought on grounds that related to outstanding costs of earlier proceedings, and as I

have said, there was an application €or security for costs.

I dismissed those applications, and a direction was

given fixing a date for filing of the respondents' statement of defence. That direction has not been complied with, but instead, the present motion has been taken out, and on 20 November, the application referred to in the motion - that is, an application under the Administrative Decisions (Judicial Review) Act 1977 - was filed, relating to the decision of the Attorney-General under

s.170. The applicants are not parties to that separate

proceeding .

In my previous judgment, to which I have referred, I

mentioned that legal aid had been sought a considerable time ago, change of solicitor for the applicants, and apparently the

and had been rejected, though the possibility of aid under s.170

had been held out. That aid was eventually granted on 13

conditions were eventually fulfilled.

There were also proceedings taken by the respondents for

the winding-up of the applicant	company, which it is suggested
spurred the final institution of	the present application. In the

Supreme Court, the winding-up proceedings have been stayed.

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The order of McLelland J. in the Supreme Court was made on 2 9 September 1986. It should perhaps more accurately be

described as an order of adjournment of the winding-up proceedings, and it was made upon an undertaking not to carry on business, or voluntarily incur debt, pending the final determination of the winding-up proceedings, and apparently not

upon an undertaking to prosecute them with diligence. But

liberty was reserved to the plaintiff in those proceedings to

apply for an order to have the winding-up proceedings restored to the list for hearing on the ground, either that the proceedings

in the Federal Court have concluded, or that those proceedings

are not being prosecuted with reasonable speed and diligence. company in the proceedings in this Court.

As far back as 18 August, the fact that legal aid had

been granted under s.170 was indicated in an affidavit which was filed in the equity proceedings. It is therefore apparent that the application under the Administrative Decisions [Judicial

Review) Act was made over three months after the date when the fact that legal aid had been granted appeared from an affidavit.

As I have said, the application under s.170 for legal aid had

been referred to much earlier than that, and the respondents

would have been in a position to make any representations they

wished to the Attorney-General. But, of course, at that stage

they would not have been aware when the application was going to

be granted, or whether it would be granted.

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It seems to me that it would be, generally speaking,

unfortunate if proceedings in the Court, under grants of legal aid, became generally subject to possibly lengthy delays pending the resolution of challenges, under the Administrative Decisions

(Judicial Review) Act, to the eligibility of the application for legal aid or the propriety of the particular grant of legal aid. In my view, so far as it is possible to secure this result, the proper resolution of any conflict between the legally aided proceedings and any such collateral challenge should rather be

the making of an application for expedition of the proceedings

under the Administrative Decisions (Judicial Review) Act than the

making of an application to stay the legally aided proceedings. After all, there is a significant principle of the law that impecuniosity does not bar a person from making a claim in the courts; the doors of justice are not closed because a person is embarrassed for lack of funds. It should not be concluded that,

if the proceedings under the Administrative Decisions (Judicial

Review) Act in a particular case are successful, an applicant's application in the court will necessarily be smothered by the failure of the Attorney-General, or other legal aid authority, to

sustain his or its grant of legal aid.

In the present case, it is true that there have been

statements which might lead to the inference that that would be

s o , but no-one is bound by such statements, and it is readily

understandable that the applicants may have been unwilling to

5.

. prosecute proceedings unaided while there was a chance of

obtaining aid, but might nevertheless, if all prospects of aid were closed off, prefer to maintain the proceedings themselves rather than not maintain them at all.

It is unnecessary to speculate about such a matter, but

I think that in principle it would be wrong to approach the

exercise of discretion on the footing that successful proceedings

under the Administrative Decisions (Judicial Review) Act to

challenge a grant of legal aid would necessarily stultify the

principal proceedings in this Court.

In this particular case, it is said that I should grant

a stay because of the burden of costs involved in preparing the

principal proceedings for trial. However, as against that, it

should be borne in mind that the present proceedings are

extremely similar to the proceedings that previously were

stultified by the inability of the applicants to finance legal

representation or, at that stage, to obtain a grant of legal aid,

and that those proceedings had advanced to the point where a date

for hearing had been fixed. Indeed, I think it had been fixed

more than once. Accordingly, the costs of filing pleadings and

discovering documents must, to some extent at any rate, be

ameliorated by the work that has already been done.

It is said that there may be further interrogatories,

but the fact is that interrogatories were administered in the

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previous proceedings. And, again, this must limit the

interrogatories, or limit the expense involved in the

administration of interrogatories, in the present proceeding,

should an order be made giving leave to administer

interrogatories again.

It seems to me that it is, at any rate, premature to

stay proceedings at this stage, when nothing is known of what may

occur in the application under the Administrative Decisions into account the stage arrived at in each of the proceedings, before a hearing date is fixed; and, of course, the efforts made by the parties to proceed expeditiously in each proceeding.

(Judicial Review) Act, which may be the subject of either an

application to expedite it or of some other summary proceeding.

The applicants are clearly at risk in the proceedings in

the Supreme Court in equity, having regard to the possibility of restoration of that proceeding to the list, in respect of which the judge of the Supreme Court would clearly be concerned, not only with the interests of the parties to the present proceedings in this Court, but also to have regard to the interests of

creditors generally. And I think that factor provides an

additional reason for refraining from staying the proceedings at

this stage.

In all the circumstances I refuse the motion. I think

what I should do is to give a direction fixing a date for the

l.

respondents' compliance with the direction previously given in respect of the filing and service of the statement of defence, and directions in respect of production of any further documents,

and filing of further affidavits of discovery, and the making of any applications for the administration of further interrogatories, and I should fix some date for further directions which will enable the situation to be reviewed in the light of the progress of the proceeding under the Administrative Decisions (Judicial Review) Act.

I think in the circumstances it is appropriate that the unsuccessful respondents should pay the costs of the motion, and

I so order.

I certify that this and the

preceding six ( 6 ) pages are a

true copy of the Reasons for

Judgment herein of his Honour

Mr. Justice Burchett.

Dated: 1 December, 1986. /42!h W Associate