Garlick v Kerbaj (No 3) - [2023] VSC 147

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:	10 March 2023, last of the supplementary submissions filed 28 March 2023
DATE OF RULING:	30 March 2023
CASE MAY BE CITED AS:	Garlick v Kerbaj & Ors (No 3)
MEDIUM NEUTRAL CITATION:	[2023] VSC 147

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PRACTICE AND PROCEDURE – Application by former solicitor for two parties to be substituted for them as party to the proceeding as a consequence of an assignment – Whether assignors should remain parties to the proceeding where the assignment is an equitable assignment rather than a legal assignment – Jurisdiction to order substitution enlivened – Special circumstances exist so as to justify assignors not remaining as parties – Potential for conflict with earlier ruling restraining solicitor from acting in this proceeding (Garlick v Kerbaj & Ors (No 2) [2022] VSC 778) – Substitution ordered, subject to conditions so as to not bring the administration of justice into disrepute – Pentridge Village Pty Ltd (in liq) v Capital Finance Australia Ltd (2018) 58 VR 1 – Culve Engineering Pty Ltd v Apollo General Engineering (Aust) Pty Ltd (in liq) (2017) 53 VR 219 – Timbercorp Finance Pty Ltd (in liq) v FTM Nominees Pty Ltd [2015] VSC 498 – Property Law Act 1958 (Vic), s 134 – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 9.09(2)(a).

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APPEARANCES:	Counsel	Solicitors
The Applicant (Patrick Lennon) in person
For the First Defendant	Mr S Clemens of counsel	EC Legal

HER HONOUR:

Introduction

By summons filed 1 March 2023, Patrick Lennon (‘Lennon’) applies for orders that he be substituted for the Third and Fourth Defendants in this proceeding, pursuant to r 9.06 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’); alternatively that he be given leave to prosecute the claims of the Third and Fourth Defendants in the proceeding (‘Application’). The Application is supported by two affidavits sworn by Lennon on 1 and 15 March 2023, an affidavit sworn 1 March 2023 by the Third Defendant and an affidavit sworn 1 March 2023 by the Fourth Defendant.

The Application came on for hearing on 10 March 2023. On that date, Lennon appeared and made submissions in support of the Application. The First Defendant appeared, by his counsel, and opposed the Application. No other party appeared. After hearing submissions, I made orders that Lennon file and serve a further affidavit by 15 March 2023, the First Defendant file and serve a short supplementary outline by 20 March 2023, and Lennon file and serve a short supplementary outline in reply by 23 March 2023. Lennon filed a further affidavit and the First Defendant filed a supplementary outline by the dates stipulated. Lennon had not filed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Garlick v Kerbaj (No 3)

Details

AGLC: Garlick v Kerbaj (No 3) [2023] VSC 147
Case: [2023] VSC 147
Decision Date: 30 March 2023

CaseChat Overview and Summary

Garlick v Kerbaj (No 3) involved an application by a former solicitor, who had represented both parties, to be substituted for them in the proceedings. The nature of the dispute related to an assignment of claims, and the court had to determine whether the assignors should remain as parties to the proceeding. The court was required to decide whether the assignors should be substituted with the assignee and, if so, whether there were special circumstances justifying such substitution in the context of an equitable assignment. The court had to consider the potential for conflict with an earlier ruling that restrained the solicitor from acting in the proceeding.

The court held that the jurisdiction to order substitution was enlivened and that special circumstances did exist to justify the assignors not remaining as parties. The court noted that the potential for conflict with the earlier ruling and the equitable nature of the assignment warranted careful consideration. The court also considered the potential for bringing the administration of justice into disrepute if the assignors were not substituted. The court ordered the substitution of the assignee for the assignors, subject to conditions to ensure that the administration of justice was not compromised. The court referred to previous cases such as Pentridge Village Pty Ltd (in liq) v Capital Finance Australia Ltd (2018) 58 VR 1, Culve Engineering Pty Ltd v Apollo General Engineering (Aust) Pty Ltd (in liq) (2017) 53 VR 219, and Timbercorp Finance Pty Ltd (in liq) v FTM Nominees Pty Ltd [2015] VSC 498. The court also considered the relevant provisions of the Property Law Act 1958 (Vic) and the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

In summary, the court granted the application for substitution of the assignee for the assignors in the proceeding, subject to conditions. The court found that the special circumstances, including the potential for conflict with the earlier ruling and the equitable nature of the assignment, justified the substitution. The court also ensured that the administration of justice would not be compromised by the substitution.

Orders