Garlick v Kerbaj (No 2)

[2022] VSC 778

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

PROPERTY LIST

S ECI 2020 02573

BETWEEN:

DARRYN GARLICK (as Representative of the estate of JACK JOHN ERMAN)	Plaintiff
v
DANIEL KERBAJ & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Matthews AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	14 October 2022
DATE OF RULING:	15 December 2022
CASE MAY BE CITED AS:	Garlick v Kerbaj & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 778

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PRACTICE AND LEGAL PRACTITIONERS – Solicitors – Inherent jurisdiction – Restraining solicitors from acting – Test to be applied – Interests of justice – Conflict of interest between clients – Solicitor’s personal interest – Where solicitor likely to be a material witness – Civil Procedure Act 2010 (Vic) – Alleged breach of overarching obligations – Solicitors Conduct Rules – Res judicata or abuse of process – Firm of solicitors and its principal restrained from acting.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Lennon, solicitor	Lennon Lawyers
For the First Defendant	Mr S Clement	EC Legal
For the Third and Fourth Defendant	Mr P Lennon, solicitor	Lennon Lawyers
No appearance by the Second Defendant
The Fifth Defendant was excused from appearing

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

Background to this proceeding................................................................................................... 2

The June Ruling............................................................................................................................. 4

Procedural background in respect of the Restraint Application............................................ 6

Applicable Legal Principles............................................................................................................. 7

Submissions...................................................................................................................................... 11

Res judicata and abuse of process............................................................................................ 11

The Respondents’ submissions........................................................................................ 11

Kerbaj’s submissions......................................................................................................... 12

Administration of justice............................................................................................................ 13

Kerbaj’s submissions......................................................................................................... 13

The Respondents’ submissions........................................................................................ 16

Ongoing CPA enquiry................................................................................................................ 17

Kerbaj’s submissions......................................................................................................... 17

The Respondents’ submissions........................................................................................ 18

Conflict of interests between the Respondents, Argyle Lending and the Lennons.......... 19

Kerbaj’s submissions......................................................................................................... 19

The Respondents’ submissions........................................................................................ 20

Legal practitioners acting in a matter in which they may be a material witness.............. 21

Kerbaj’s submissions......................................................................................................... 21

The Respondents’ submissions........................................................................................ 21

Prejudice to parties..................................................................................................................... 22

Kerbaj’s submissions......................................................................................................... 22

The Respondents’ submissions........................................................................................ 23

Consideration.................................................................................................................................... 27

Res Judicata and Abuse of Process........................................................................................... 27

Administration of Justice........................................................................................................... 29

Ongoing Civil Procedure Act Enquiry..................................................................................... 31

Conflicts of interest..................................................................................................................... 32

Legal practitioners acting in a matter in which they may be a material witness.............. 34

Prejudice to the Respondents.................................................................................................... 35

Conclusion......................................................................................................................................... 38

HER HONOUR:

Introduction

1. This ruling concerns an application made by summons dated 21 June 2022 by Daniel Kerbaj, the first defendant (‘Kerbaj’), to restrain Patrick Lennon and Lennon Lawyers (together, ‘the Lennons’), from acting for any of the parties in this proceeding (‘Restraint Application’).[1]  In particular, Kerbaj sought to restrain the Lennons from acting for the plaintiff Darryn Garlick (‘Garlick’) as representative of the estate of Jack John Erman (‘Erman’), Graham George Ali, the third defendant (‘Ali’), and Victoria Louise Horner, the fourth defendant (‘Horner’), in this proceeding and from advising them in respect of the proceeding.  Kerbaj’s summons also sought other relief, however that is not relevant to the Restraint Application and is not dealt with in this…