Ji v Bluestars Real Estate Pty Ltd - [2018] VSC 11

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2017 00215

KUIFU (JEFFREY) JI	Plaintiff
v
BLUESTARS REAL ESTATE PTY LTD (ACN 141 183 548) AND OTHERS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15, 20 DECEMBER 2017, 16 JANUARY 2018
DATE OF RULING:	31 JANUARY 2018
CASE MAY BE CITED AS:	JI v BLUESTARS REAL ESTATE PTY LTD
MEDIUM NEUTRAL CITATION:	[2018] VSC 11

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LEGAL PRACTITIONERS — Solicitors — Conflict — Application to restrain solicitor from acting — Administration of justice and appearance of justice — Actual conflict — Need for informed independent advice — Proportionality of costs — Civil Procedure Act 2010 (Vic), s 24(a) and (b) — Legal Profession Uniform Law Application Act 2014 (Vic), sch 1, ss 419, 423(2)(c) — Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015, r 11.3, Legal Profession Uniform Conduct (Barristers) Rules 2015, r 119.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Garratt QC with Mr S Freire	Wisewould Mahony
For the First, Second and Fourth Defendants	Mr L Glick QC (15 December 2017) with Mr J Love	Australian Legal Advisory Centre
For the Third Defendant	Mr A Felkel	Sabelberg Morcos

HIS HONOUR:

A. Introduction

By summons, the plaintiff, Kuifu (Jeffrey) Ji (“Ji”), seeks an order restraining a solicitor presently on the record from continuing to act for multiple defendants in the proceeding. Min Juan Dai (“Dai”), of the law firm Australian Legal Advisory Centre, presently acts for the first defendant, Bluestars Real Estate Pty Ltd (“Bluestars”), the second defendant, Fangming (Bob) Dai (“Fangming”) and the fourth defendant, MXXD Investment Pty Ltd (“MXXD Investment”) (collectively, “the 3 Defendants”).[1] The third defendant, Ying Li (“Li”), is separately represented.
[1]Dai and Fangming are not related.

Fangming has a connection with Bluestars and MXXD Investment. He is a director of both of those companies and holds a 25 percent shareholding (though not beneficially) in each of them. A further 25 percent in each company is held by Xu Sync Investment Pty Ltd, a company controlled by Fangming’s aunt. As to the remaining 50 percent, the shareholdings of Bluestars and MXXD Investment do not align.

B. Background

Ji is a citizen of China, who, according to the amended statement of claim filed 30 October 2017, has “no significant command” of English. It is alleged that, in 2014, he retained Bluestars to advise him about real estate purchases in Melbourne, and to act for him with respect to any such purchases and related financing.

B.1 The Bentleigh East Property

Very broadly, Ji alleges that in about February 2015, Bluestars advised him to consider purchasing a property in Bentleigh East (“the Bentleigh East Property”). Ji was asked to pay a deposit of approximately $10,000 in exchange for Bluestars agreeing to act for him at the auction of this property. The money was duly paid by Ji, accompanied by an instruction for Bluestars not to spend more than approximately $1 million.

It is alleged…

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.

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Details

Case: [2018] VSC 11
Decision Date: 31 JANUARY 2018

CaseChat Overview and Summary

The case of Ji v Bluestars Real Estate Pty Ltd involved a dispute concerning the propriety of a solicitor's conduct in representing both a plaintiff and a defendant in separate proceedings. The application was before the Supreme Court of Victoria, where the plaintiff sought an order to restrain the defendant solicitor from acting in the capacity of solicitor for the defendant in the proceedings. The plaintiff argued that the solicitor's dual representation created an actual conflict of interest and would compromise the administration of justice, resulting in an appearance of impropriety.

The court was tasked with determining whether the solicitor's conduct breached professional ethical standards and whether it warranted an order to prevent the solicitor from representing the defendant. Key legal issues included the existence of an actual conflict of interest, the necessity for the solicitor to obtain informed independent advice, the proportionality of the costs incurred in obtaining such advice, and the proper interpretation of relevant statutory provisions and professional conduct rules.

In its decision, the court found that the solicitor's dual representation did indeed create an actual conflict of interest. It was held that the solicitor should have sought informed independent advice to resolve the conflict before continuing to act for the defendant. The court emphasised the importance of maintaining the integrity of the legal profession and ensuring the appearance of justice was upheld. It was also noted that the costs of obtaining such advice were proportionate given the circumstances. Consequently, the court granted the plaintiff's application and restrained the defendant solicitor from acting for the defendant in the proceedings.

Orders