Glentham Pty Ltd v McPhee (No.2)
[2007] FMCA 2052
•3 December 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GLENTHAM PTY LTD v McPHEE (No.2) | [2007] FMCA 2052 |
| PRACTICE & PROCEDURE – Adjournment – privilege waived over counsel’s advice on special leave application – whether counsel giving advice over which privilege waived ought argue application for adjournment pending determination of the special leave application – position and duties of counsel – adjournment granted. |
| Federal Magistrates Court Rules2001 (Cth) r.1.03 Federal Magistrates Act 1999 (Cth) ss.3 and 42 |
| Glentham Pty Ltd v McPhee [2007] FMCA 1939 Mahmoud v The Owners Corporations Strata Plan 811 [No.2] [2006] FMCA 1711 Patrick v Wadoon Pty Ltd (No.2) [2007] FMCA 1766 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 |
| Applicant: | GLENTHAM PTY LTD |
| Respondent: | MICHAEL JOHN MCPHEE |
| File number: | PEG 274 of 2006 |
| Judgment of: | Lucev FM |
| Hearing date: | 3 December 2007 |
| Date of last submission: | 3 December 2007 |
| Delivered at: | Perth |
| Delivered on: | 3 December 2007 |
REPRESENTATION
| Counsel for the Applicant: | MR M.C. HOTCHKIN |
| Solicitors for the Applicant: | HOTCHKIN HANLY |
| Counsel for the Respondent: | MR R.J.L. McCORMACK |
| Solicitors for the Respondent: | STABLES SCOTT |
ORDERS
The matter be adjourned until 10:15am on 21 December 2007.
Costs of today thrown away reserved, and if not agreed between the parties prior to 21 December 2007, all matters in relation to those costs are to be heard on 21 December 2007.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 274 of 2006
| GLENTHAM PTY LTD |
Applicant
And
| MICHAEL JOHN MCPHEE |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
The matter before the Court today was an application to adjourn a creditor’s petition pending a special leave application to the High Court. When the matter came on for hearing the respondent, who is the applicant for adjournment pending the special leave application, made application to further adjourn the matter.
The basis for the further adjournment application is that the legal advice concerning the special leave application,[1] has been put squarely in issue by supplementary submissions filed by the applicant on 30 November 2007, and that counsel for the respondent was involved in the preparation of that advice.
[1] “Special Leave Advice”. The Special Leave Advice has been the subject of an earlier judgment and orders of this Court: Glentham Pty Ltd v McPhee [2007] FMCA 1939 (“Glentham No.1”). In Glentham No.1 the Court held that legal professional privilege in the Special Leave Advice had been waived by voluntary disclosure.
Counsel for the respondent says that he was unaware that this matter was likely to be an issue and says that the fact that the matter was specifically raised by the respondent at the time judgment was handed down in Glentham No. 1 on 16 November 2007[2] was not brought to his attention. On the occasion of handing down of the judgment in Glentham No. 1, Mr Goldfinch, who then appeared for the respondent to take judgment said:
“The only issue I have or we have now is that the orders that you propose or the findings on the orders that you are proposing may have the effect that Mr McPhee will need new counsel so I’m just wondering where that leads us if anywhere.”[3]
[2] Transcript, 16 November 2007, p.1.
[3] Transcript, 16 November 2007, p.1.
The Court then observed that there might be other things that might happen as a consequence of the judgment and that is why the matter had been listed in the way it was listed in the orders issued on 16 November 2007.[4]
[4] Transcript, 16 November 2007, p.1.
Counsel for the respondent says that where the legal qualitative grounds proposed in respect of the Special Leave Advice based on the advice that he and Mr McKerracher QC (as he then was) gave are in issue, that his ability to put the matter properly before the Court in the independent and objective manner required of counsel is compromised and that it may affect:
a)the quality of the submissions made; and
b)possibly, the view that the Court takes as to the partiality of those submissions.
Counsel for the respondent submits that it is not in the interests of justice for the matter to be pressed before the Court by present counsel for the respondent.
The Court considers that there is some force in those submissions. Counsel, especially counsel practising as a barrister at the independent bar, as counsel for the respondent does (and the Court takes it that there is no dispute about that matter), serve a valuable function in the interests of justice and its administration by their ability to deliver independent objective advice to clients of their instructing solicitors, and to put submissions before the Court in the same way, in pursuance of their duty to the Court.
There is, of course, a question of balance here, the interests of justice and questions as to prejudice, to be weighed. The applicant’s counsel says that the Special Leave Advice in dispute was not provided to the applicant until 26 November 2007. The Court observes that is in accordance with the orders made on 16 November 2007. However, certain Australian Taxation Office documents, the subject of an undertaking in previous proceedings that they would be provided[5] were not provided until 28 November 2007, and counsel for the applicant says it was therefore not possible to make the supplementary submissions which were made until 30 November 2007. The Court accepts that that is the case.
[5] Transcript, 7 November 2007, p.2.
Counsel for the applicant says that it is no part of the argument that counsel for the respondent ought not make submissions in respect of the Special Leave Advice, and in any event says that only one part of the supplementary submissions, paragraph 3, goes to the Special Leave Advice as opposed to the merits of the grounds of the special leave application and whether they are genuine and arguable. Paragraph 3 of the supplementary submission reads as follows:
“The legal advice as to the merits of the special leave application upon which the respondent says he relied in making the application for special leave to appeal to the High Court misstates the relevant criteria for the grant of special leave, refers to such application as being “inherently difficult” because of a large failure rate yet nonetheless that counsel “would have thought that there were reasonably strong prospects” in being granted special leave but then identifies a commercial benefit in providing the respondent with a negotiating chip if such an application should be brought.”[6]
[6] Applicant’s Supplementary Submissions, para. 3.
The applicant adverts, properly, to the fact that this matter was, as the Court has already indicated, expressly raised on the last occasion the parties were before the Court. The applicant also says that the only matter which is in issue to the extent that it is required to be cross-examined on is Mr McPhee’s stated intention in bringing the special leave application. The applicant says that it has no intention to take issue with counsel’s role in the proceedings to the extent that counsel seeks to make submissions in relation to the relevant issues and also points to:
a)the practical difficulty in re-listing the matter at this time of the year; and
b)to the unfairness that might flow to the applicant if alternative counsel is required to be briefed.
As the Court indicated in argument it can envisage a situation where notwithstanding the purposes of both the applicant and the respondent and the best efforts of counsel, the issue of the Special Leave Advice given by counsel presently before the Court might become a contentious issue. All that it would take, for example, would be reference to it or criticism of the advice in cross-examination by the respondent himself and a statement by him in connection with that as to his state of mind to bring the entire issue of the Special Leave Advice given by counsel presently before the Court squarely into issue in a manner which might or might not have been contemplated by the parties. That is a factor which weighs for the adjournment.
A further factor which weighs for the adjournment is the position of independent counsel, for the reasons that the Court has already set out, and the Court considers in that regard that it is in the interests of justice that the respondent be best served by having independent legal advice.
The issue of delay is a factor which, given the objects of this Court as set out in ss.3 and 42 of the Federal Magistrates Act 1999 (Cth) and r.1.03 of the Federal Magistrates Court Rules 2001 (Cth), militate against ongoing delay and ongoing adjournments in proceedings. That is a factor against the granting of the adjournment now sought.
A factor in relation to the question of adjournment is how long the proceedings might be adjourned for, and as the Court indicated in argument, it is possible that the matter could be brought back before the Court in the next three weeks. So in that regard, the period of likely adjournment is a factor which probably weighs in favour of an adjournment.
As to prejudice, there is clearly no prejudice to the respondent in any adjournment. There is, however, prejudice to the applicant. The matter has been got up for argument today. That prejudice can be mitigated by an award of costs.
In all of the circumstances, particularly given the indications that were made at the previous hearing,[7] the Court has come to the view that it is in the interests of justice and the administration of justice that the respondent be able to be represented by counsel (and arguably instructing solicitors) whose advice to the respondent might not be the subject of dispute before the Court on the adjournment application. [8]
[7] See paras. 3 – 4 above.
[8] In Patrick v Wadoon Pty Ltd (No.2) [2007] FMCA 1766 at para. 17 per Lucev FM the Court observed that:
The Court will therefore order that these proceedings be adjourned to 10.15 am on 21 December 2007.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: M Hewitt
Date: 7 December 2007
“Case management considerations do not override considerations of justice, but justice requires that fairness be afforded to all parties in the litigation. Prejudice must take account of all of the circumstances of the case, including its litigation history insofar as that is relevant.”
See also Mahmoud v The Owners Corporations Strata Plan 811 [No.2] [2006] FMCA 1711 at para. 7 per Lucev FM, citing State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154 and 155 per Dawson, Gaudron and McHugh JJ, and at 166 per Kirby J.
2
2