Kingsfield Holdings Pty Ltd (in liquidation) v Rottnest Island Authority
[2025] WASC 121
•17 APRIL 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: KINGSFIELD HOLDINGS PTY LTD (in liquidation) -v- ROTTNEST ISLAND AUTHORITY [2025] WASC 121
CORAM: LUNDBERG J
HEARD: 23 MAY 2024, 3 OCTOBER 2024 & 17 DECEMBER 2024
DELIVERED : 17 APRIL 2025
FILE NO/S: CIV 2660 of 2015
BETWEEN: KINGSFIELD HOLDINGS PTY LTD (in liquidation)
First Plaintiff
JEFFREY STEWART LEE
Second Plaintiff
AND
ROTTNEST ISLAND AUTHORITY
First Defendant
STATE OF WESTERN AUSTRALIA
Second Defendant
PAOLO FILLIPO AMARANTI
Third Defendant
COLIN ROWLEY BRANDIS
Fourth Defendant
Catchwords:
Corporations - First plaintiff in liquidation - Whether to discontinue the action given the position adopted by the liquidator - Application filed (but not pressed) by the plaintiffs to amend writ of summons as to first plaintiff's trustee capacity - Appropriate to grant leave to discontinue the action - Turns on own facts
Bankruptcy - Second plaintiff subject to sequestration orders - Action stayed pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth) - Action listed by Court for further hearing to consider whether proceeding should be dismissed following the stay determination - Defendants seek dismissal of action given the bankruptcy status of the second plaintiff following approach in Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47 - Defendants also seek dismissal of the second plaintiff's action on the basis of want of prosecution - Action should be dismissed - Turns on own facts
Practice and procedure - Further interlocutory applications brought by the second plaintiff following sequestration orders being made and following grant of stay - Interlocutory applications brought to restrain solicitors acting for the defendants, to require production of further documents by the defendants, for the managing judge to recuse himself on the grounds of reasonable apprehension of bias, and to re-open the proceedings following determinations by the Court - Held that the second plaintiff has no standing or capacity to bring these applications, but application also dismissed on their merits - Turns on own facts
Legislation:
Bankruptcy Act 1966 (Cth), s 60(2), s 60(4), s 116(1)(b), s 134(1)(j)
Result:
Application to restrain solicitors dismissed.
Application for further discovery dismissed.
Application for recusal dismissed.
Application to re-open proceedings dismissed.
Action brought by first plaintiff is discontinued.
Action brought by second plaintiff is dismissed.
Category: B
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | In person |
| First Defendant | : | S J Olynyk |
| Second Defendant | : | S J Olynyk |
| Third Defendant | : | S J Olynyk |
| Fourth Defendant | : | S J Olynyk |
Solicitors:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | In Person |
| First Defendant | : | State Solicitor's Office |
| Second Defendant | : | State Solicitor's Office |
| Third Defendant | : | State Solicitor's Office |
| Fourth Defendant | : | State Solicitor's Office |
Case(s) referred to in decision(s):
Barnel Investments Pty Ltd v Conceptual Technologies Pty Ltd [2022] WASC 8
Bell v Cribb [2013] WASCA 159
British American Tobacco Australia Services Limited v Laurie [2011] HCA 2; (2011) 242 CLR 283
Charisteas v Charisteas [2021] HCA 29; (2021) 273 CLR 289
Commonwealth Bank of Australia t/as Bankwest v Bell [2014] WASC 201
Commonwealth Bank of Australia v Quade [1991] HCA 61; (1991) 178 CLR 134
Doble v Chaffey Services Pty Ltd [2023] WASCA 180
Duckworth v Water Corporation [2012] WASC 30
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337
Greer (1992) 62 A Crim R 442
Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93; (2005) 30 WAR 398
Hearn v Street [2008] HCA 36; (2008) 235 CLR 125
Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561
Kingsfield Holdings Pty Ltd v Rutherford [2016] WASC 117
Lee v Brandis [2024] WASCA 150
Lee v Department of Health [2020] WASC 103
Lee v Department of Justice [2025] WASC 105
Lee v Kingsfield Holdings Pty Ltd & Ors [2024] HCASL 79
Lee v The State of Western Australia [2023] WASC 182
Lee v The State of Western Australia [2023] WASCA 165
Lee v The State of Western Australia [No 2] [2023] WASC 247
Leighton v Garnham [No 4] [2016] WASC 134
LPH Developments Pty Ltd (In Liq) (as trustee for LPH Developments Keegan Street Trust) v Jameson Moore Pty Ltd [No 4] [2018] WASC 401
Moran v Minco Holdings Pty Ltd (in liq) [2022] WASCA 93
Muir v Angeles [2020] NSWSC 1056
Ogbonna v CTI Logistics [2021] WASCA 21
Re Lofthouse [2001] FCA 25; (2001) 107 FCR 151
Smits v Roach [2006] HCA 36; (2006) 227 CLR 423
Stobbart v Mocnaj (1998) 16 WAR 318
Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47
Vakauta v Kelly (1989) 167 CLR 568
Voskuilen v Morrisset Mega Markets [2005] NSWSC 34
Yap v Bailiff [2006] WADC 119
Table of Contents
A. Introduction
B. The nature of the action
C. The legal status of the plaintiffs
(1) Kingsfield
(2) Mr Lee
D. The applications before the Court
(1) Mr Lee's applications
Amendment Application
Restraint Application
Discovery Application
Recusal Application
Application to Re-open
(2) The defendants' applications
E. Whether Mr Lee has standing to conduct the proceedings?
F. Restraint Application
(1) Background
(2) Disposition
G. Discovery Application
(1) Background
(2) Disposition
H. Recusal Application
(1) Background
(2) Materials before the Court
(3) Bases for the Recusal Application
(4) Disposition – whether a reasonable apprehension of bias
Refusal of adjournment on 31 May 2023
Hearings on 7 and 28 September 2023
Orders made on 13 October 2023
Late filing of the State's submissions on 1 December 2023
Defendants' failures to file affidavits
Hearing on 21 December 2023
Hearing on 23 May 2024
Conclusion
(5) Disposition – whether the bias challenge has been waived
I. Application to Re-open
(1) Background
(2) Disposition
J. State's Dismissal Application
(1) Background
(2) Materials before the Court
(3) The position of the State
(4) The position of Mr Lee
(5) Disposition
K. Conclusion and orders
ATTACHMENT A Extracts from transcript of 23 May 2024
LUNDBERG J:
A. Introduction
These reasons concern several interlocutory applications brought by one of the plaintiffs, and by the defendants, in this long-running action. The action was the subject of numerous interlocutory hearings during late 2023 and 2024,[1] three of which may be described as substantive hearings (and which were held on 23 May 2024, on 3 October 2024 and, finally, on 17 December 2024).
[1] Directions hearings have been held, and orders made, on 7 September 2023, 28 September 2023, 5 October 2023, 12 October 2023, 21 December 2023, 22 February 2024, 23 May 2024, 13 August 2024, 30 August 2024, 3 October 2024, and 17 December 2024.
At the outset, it is convenient to put these applications, and the present legal status of the plaintiffs, in some context.
B. The nature of the action
The plaintiffs (being Kingsfield Holdings Pty Ltd and Mr Lee), have advanced in this action declaration and damages claims (including a claim for exemplary damages) against the Rottnest Island Authority, the State of Western Australia, and two individuals who were officers of the Rottnest Island Authority at the relevant time.
At all relevant times, Mr Lee has been the sole director and shareholder of Kingsfield, noting that liquidators were appointed to the company in November 2023.
Mr Lee represents himself in these proceedings. The defendants are represented by the State Solicitor's Office.
The conduct on the part of the defendants which is sought to be impugned in the action concerns the negotiations for, and the operation of, the lease obtained in respect of Kingsfield's two businesses on Rottnest Island, being the pharmacy known as the Wellness Centre and the café business known as Quokka Joe's Café. The conduct which is the focus of the complaints occurred between around August 2005 and around late 2009.
In general terms, the plaintiffs allege that the Rottnest Island Authority, through the actions of the named officers, engaged in conduct that was misleading or deceptive, or constituted misfeasance in public office, when it sent a letter to the State's Chief Pharmacist recommending that the General Store on Rottnest Island should retain a particular licence, enabling it to sell certain pharmaceutical products, in competition with Mr Lee's pharmacy business.
The plaintiffs further allege that the officers of the Rottnest Island Authority acted in a manner that was misleading or deceptive, or a misuse of public office, when they swore affidavits in proceedings in the State Administrative Tribunal, in which the plaintiffs and the Rottnest Island Authority disputed the construction of a rent review clause in a lease agreement for the Wellness Centre.
The present action was filed in October 2015 but was only served many months later, with appearances then being filed by the defendants in September 2016 and November 2016. I understand some of the delay in progressing the action in the early stages is explained by the illness of the plaintiffs' counsel, as well as by the pendency of the defamation actions brought by the plaintiffs, which I will briefly now mention.[2]
[2] ts 189 (23 May 2024)
The present action was preceded by two other actions in this Court brought by Kingsfield and Mr Lee.[3] In those actions, the plaintiffs claimed damages arising from allegedly defamatory words spoken by an individual, concerning Quokka Joe's Café. The individual concerned, a Mr Rutherford, was the director of Abellio Pty Ltd, the lessee of the Rottnest Bakery. These defamations actions were dismissed by Kenneth Martin J in April 2016, following a trial.[4]
[3] CIV 1106 of 2013 and CIV 1147 of 2013.
[4] Kingsfield Holdings Pty Ltd v Rutherford [2016] WASC 117 (Kenneth Martin J).
The present action has been marked in recent times by interlocutory disputes, and has been further delayed by the insolvency status of the two plaintiffs, to which I now turn.
C. The legal status of the plaintiffs
(1) Kingsfield
On 21 November 2023, Kingsfield was made the subject of winding up orders issued by the Federal Court of Australia.[5]
[5] Orders were made in this regard on 21 November 2023 in Sullivan Commercial Pty Ltd v Kingsfield Holdings Pty Ltd (Federal Court of Australia WAD 248 of 2023), as is apparent from the affidavit of Stephen John Olynyk sworn 20 December 2023 (Folio 153).
The appointed liquidators for Kingsfield, Mr Aaron Dominish and Mr Cameron Shaw, have declined to progress the action and they have proceeded on the basis that the proceedings are stayed. Kingsfield has accordingly taken no further part in the prosecution of this action since 18 December 2023.[6]
[6] See the letters from Hall Chadwick (the liquidators of Kingsfield) to the State Solicitor's Office and Mr Lee dated 18 December 2023 and 15 February 2024.
In my view, it is appropriate that leave now be granted to Kingsfield to discontinue these proceedings and that an order be made that the proceedings are hereby discontinued insofar as Kingsfield is concerned.[7] I will order accordingly. In all the circumstances, as these reasons further demonstrate, there is nothing to be gained by allowing this historical action to remain on foot insofar as Kingsfield is concerned, given the attitude adopted by the liquidators[8] and given the decision made by the plaintiffs not to progress any application to amend the capacity in which Kingsfield sues in this proceeding.[9]
(2) Mr Lee
[7] As submitted by the defendants in their outline of submissions dated 20 February 2024 [16] (Folio 159).
[8] As submitted by the defendants at ts 188 (23 May 2024) and as appears from the correspondence from the liquidators dated 18 December 2023 and 15 February 2024.
[9] ts 165 - 166 and ts 176 (23 May 2024).
The recent applications before the Court have been pressed solely by the second plaintiff, Mr Lee.
The defendants emphasise that Mr Lee presently lacks standing or capacity to conduct this action on his own behalf, having regard to the sequestration orders made on 3 November 2022 and the subsequent appointment of his trustee in bankruptcy.[10]
[10] Affidavit of Stephen John Olynyk sworn 27 April 2023 (Folio 108); Affidavit of Mr Lee sworn 27 March 2023 [3] (Folio 94).
Indeed, almost two years ago, on 5 July 2023, this Court dismissed Mr Lee's application for leave to proceed with the action, which had been brought pursuant to s 60(4)(a) of the Bankruptcy Act 1966 (Cth).[11] The orders of the Court made on that date were to the effect that the action would remain stayed by operation of s 60(2) of the Bankruptcy Act, with the matter to be listed for further directions to determine whether the action should be dismissed.[12]
[11] Lee v The State of Western Australia [No 2] [2023] WASC 247, [49] – [54], [81] and [82] (Lundberg J).
[12] Orders made on 5 July 2023, [1], [3] and [4].
Mr Lee presently remains an undischarged bankrupt. I will shortly return to the issue of Mr Lee's capacity to continue to litigate this action.
D. The applications before the Court
(1) Mr Lee's applications
Given the status of Mr Lee as a bankrupt, given the decision of the Court on 5 July 2023 that this action was stayed, and given the directions made by the Court to list the matter solely to assess whether the action ought be dismissed as a result, it might ordinarily have been thought that the matter could be resolved in short order.
Notwithstanding his status as a bankrupt, and seemingly undaunted by the orders of the Court made on 5 July 2023, Mr Lee has, since that time, brought several applications which have not been confined to the question whether the action should be dismissed (being the only issue raised by order 3 of the orders made on 5 July 2023). Mr Lee has filed the following applications in this matter.
Amendment Application
On 16 October 2023, Mr Lee filed an application for leave to amend the writ to change the capacity in which Kingsfield sues as a plaintiff in this action (Folio 137).[13] This application was heard on 23 May 2024. Mr Lee did not seek to press the application,[14] and no steps had been taken by Kingsfield or the liquidators to progress that application. The Amendment Application was accordingly dismissed at that hearing.[15]
Restraint Application
[13] Affidavit of Alan James Camp sworn 16 October 2023 (Folio 149); Affidavit of Alan James Camp sworn 30 November 2023 (Folio 150); and Affidavit of Mr Lee sworn 21 February 2024 [2]-[3] (Folio 160).
[14] Orders made 23 May 2024, [1] and ts 165 – 166 (23 May 2024).
[15] ts 176 (23 May 2024).
On 16 October 2023, Mr Lee also filed an application, through the same chambers summons, to restrain the State Solicitor's Office from acting for the defendants (Folio 137). This application was heard on 23 May 2024 and dismissed on the same date.[16] My reasons for dismissing this application are set out at [30] to [51] and [52] to [67] below.
[16] Orders made 23 May 2024, [1] and ts 176 (23 May 2024).
A related application, also dated 16 October 2023, was later received for filing from Kingsfield on 29 November 2023 (Folio 147). Similarly, this application was dismissed on 23 May 2024.[17]
Discovery Application
[17] Orders made 23 May 2024, [3] and ts 176 (23 May 2024).
On 5 March 2024, Mr Lee filed an application seeking discovery against the State (Folio 162). This application was heard on 23 May 2024 and dismissed on the same date.[18] My reasons for dismissing that application are set out at [30] to [51] and [68] to [74] below.
Recusal Application
[18] Orders made 23 May 2024, [2] and ts 176 (23 May 2024).
On 9 August 2024, Mr Lee filed an application seeking orders that I recuse myself in this action (Folio 170). I heard that application on 3 October 2024 and 17 December 2024, and reserved my decision. My reasons in relation to the Recusal Application are set out at [51] and [75] to [187] below.
Application to Re-open
On 3 January 2025, after I had determined some of the above applications and after I had reserved my decision on certain of the applications, Mr Lee filed an application to re-open the proceedings (Folio 184). The parties were informed that the Court would consider that application in the course of its reasons on the reserved matters.
My reasons in relation to the Application to Re-open are set out at [188] to [198] below.
(2) The defendants' applications
On 16 October 2023, the defendants filed an application to dismiss the action for want of prosecution (Folio 135), which I will refer to as the State's Dismissal Application. This application was heard on 23 May 2024 and I reserved my decision on the application.[19] My reasons for disposing of this application are set out at [199] to [227] below.
[19] Orders made 23 May 2024, [4].
For completeness, I note that an earlier application was filed in April 2023 by the first and second defendants, seeking an order for security for costs against both plaintiffs in the amount of $215,000 (Folio 103).[20] That application was opposed by Mr Lee, and adjourned sine die at the hearing on 23 May 2024.[21] It is no longer necessary to address that application.
[20] The application for security for costs was supported by the affidavit of Mr Olynyk sworn on 27 April 2023 (Folio 108), together with submissions filed on 28 April 2023 (Folio 111).
[21] Orders made 23 May 2024, [5] and ts 209 (23 May 2024).
E. Whether Mr Lee has standing to conduct the proceedings?
In respect of all the applications sought to be advanced by Mr Lee, the State presented a threshold, holistic answer anchored to Mr Lee's status as an undischarged bankrupt and the stay of the action ordered by the Court.[22]
[22] See, for example, at ts 145 and ts 207 (23 May 2024).
As earlier noted, on 5 July 2023, this Court ordered that the action would remain stayed by operation of s 60(2) of the Bankruptcy Act. The sole issue remaining for consideration, from the Court's perspective, was whether the action should remain stayed or should be dismissed.
At the time, I stated:[23]
…as to CIV 2660 of 2015, which is a substantive claim for declarations and damages, I will afford the parties a further opportunity to make submissions as to whether that action should be dismissed, or merely stayed. In addition to the estoppel concern noted above, a further relevant consideration to which regard should be had in this respect is the degree of prejudice to the defendants of simply allowing the action to be stayed. Wheeler J noted this consideration in Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47 and, on the facts of that case, considered it appropriate to seek further submissions from the parties as to whether an order for dismissal should be made
[23] Lee v The State of Western Australia [No 2] [2023] WASC 247 [81] (Lundberg J).
An appeal to the Court of Appeal against the above orders was dismissed on 27 November 2023.[24] The Court of Appeal concluded:[25]
The primary judge was correct, for the reasons that his Honour gave as reproduced at [49] above, to conclude that action CIV/2660/2015 was not an action in respect of a personal injury or wrong done to Mr Lee for the purpose of s 60(4) of the Bankruptcy Act. Mr Lee was seeking, by action CIV/2660/2015, to recover profits that he might otherwise have derived thereby augmenting his property or estate. The claim was not concerned with injury to Mr Lee's person, character or feelings. Insofar as Mr Lee failed to establish that the proceedings he had commenced in CIV/2660/2015 was an action in respect of a personal injury or wrong done to him it followed that appeal CACV/88/2023 was incompetent and had to be dismissed.
[24] Lee v The State of Western Australia [2023] WASCA 165 (Vaughan and Hall JJA), being appeal CACV 88 of 2023 which was heard with the related appeal in CACV 87 of 2023.
[25] Lee v The State of Western Australia [2023] WASCA 165 [55] (Vaughan and Hall JJA).
Mr Lee filed an application for special leave to appeal to the High Court against the decision of the Court of Appeal. That application was refused by the High Court on 11 April 2024.[26]
[26] Lee v Kingsfield Holdings Pty Ltd & Ors [2024] HCASL 79 (Edelman and Jagot JJ).
Mr Lee returned to the Court of Appeal in November 2024 to again seek to challenge the orders made on 5 July 2023, as well as to initiate a belated challenge to the orders made by the Court on 31 May 2023 to refuse an adjournment and to determine the particular application on the papers.[27] Both appeals required lengthy extensions of time to be granted.
[27] Lee v Brandis [2024] WASCA 150 (Vaughan and Hall JJA).
The reprised appeal against the orders made on 5 July 2023 was dismissed by the Court of Appeal as being incompetent. The Court of Appeal reiterated the proposition that a litigant has but one appeal as of right, or by leave.[28] The belated appeal against the orders made on 31 May 2023 was dismissed by the Court of Appeal on the basis it lacked utility.
[28] Lee v Brandis [2024] WASCA 150 [30] – [33] (Vaughan and Hall JJA), citing Doble v Chaffey Services Pty Ltd [2023] WASCA 180 (Mitchell and Vaughan JJA).
As matters presently stand, therefore, the decision of the Court made on 5 July 2023 remains undisturbed, to the effect that the action, insofar as Mr Lee is concerned, has been stayed since that time. The applications which have been initiated by Mr Lee in the period that has followed must be viewed against this background.
Section 60(2) of the Bankruptcy Act provides that an action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election to prosecute or discontinue the action.
By s 60(3) of the Bankruptcy Act, if the trustee does not make the election within 28 days after notice of the action is served upon him or her, the trustee shall be deemed to have abandoned the action.
In this regard, there is a distinction between:
(a)the action or the legal proceeding; and
(b)the right or chose in action or cause of action which gives rise to the bringing of the claim.
Ipp J emphasised this distinction in Stobbart v Mocnaj,[29] by reference to established authority. His Honour noted in that case that s 60(3) provides only for an abandonment of the action or the legal proceeding – it does not extinguish the cause of action.
[29] Stobbart v Mocnaj (1998) 16 WAR 318, 321 and 323.
It has been explained that s 60 operates to stay pending proceedings for the purpose of protecting the bankrupt's creditors, 'by preventing the unnecessary dissipation of the assets of the estate in fruitless litigation' and 'protecting a defendant or other party to a pending proceeding'.[30]
[30] Re Lofthouse [2001] FCA 25; (2001) 107 FCR 151 [19] (Gray J). See also Duckworth v Water Corporation [2012] WASC 30 [43] – [45] (Edelman J).
Further, it has been held that this statutory provision:[31]
…has been enacted deliberately as a broad provision, so as to encompass any proceeding brought by a bankrupt before bankruptcy. The exceptions have been expressed quite narrowly. The intention is that, once a bankruptcy occurs, no further costs should be incurred in a proceeding unless the trustee in bankruptcy makes an election to continue the proceeding. If such an election is made, the trustee in bankruptcy will ordinarily become substituted as plaintiff in the pending proceeding, in the capacity of trustee in bankruptcy for the former plaintiff. The trustee in bankruptcy will thereby become liable for the costs of the proceeding in the event that it is unsuccessful and a costs order is made in favour of the defendant in the proceeding or some other party to it.
[31] Re Lofthouse [20] (Gray J).
The above provision is subject to some exceptions, such as is found in s 60(4), that a bankrupt may continue an action commenced by him or her before he or she became a bankrupt in respect of 'any personal injury or wrong done to the bankrupt'.
On 5 July 2023, I concluded that this action was not an action for personal injury or wrong done to Mr Lee, within the meaning of the exception in s 60(4)(a) of the Bankruptcy Act.
That conclusion has not been disturbed on appeal.
At all times since Mr Lee's estate was made subject to sequestration orders on 3 November 2022, and certainly since orders of this Court were made on 5 July 2023, this action has been stayed insofar as Mr Lee is concerned.
Further, pursuant to s 116(1)(b) and s 134(1)(j) of the Bankruptcy Act, from the vesting of a bankrupt's property in a trustee in bankruptcy, only the trustee in bankruptcy has the power to 'bring, institute or defend any action or other legal proceeding relating to the administration' of the bankrupt's estate.[32]
[32] Commonwealth Bank of Australia t/as Bankwest v Bell [2014] WASC 201 [16]; Bell v Cribb [2013] WASCA 159 [12].
It follows that Mr Lee has no standing or capacity to bring applications in the proceeding or take steps, unless those applications or steps are directed at appealing or challenging the orders made by the Court on 5 July 2023.
This is, in and of itself, a sufficient basis for the Court to dismiss the Restraint Application, the Discovery Application, and the Application to Re-Open. Accordingly, it is strictly unnecessary to determine these applications on their merits, but I have nonetheless done so.
As to the Recusal Application, Mr Lee's status as a bankrupt and the stay of the action is a sufficient basis to dismiss that application. However, as Mr Lee's application in this regard purports to challenge the decision of the Court made on 5 July 2023, I will also address this application on the merits in any event.
F. Restraint Application
(1) Background
This application was filed on 16 October 2023, in conjunction with an application to amend the writ of summons, and was substantively heard on 23 May 2024. In support of the application, Mr Lee principally relied upon his affidavit sworn on 10 May 2023, but filed on 12 May 2023 (Folios 115 to 122). That affidavit has 55 attachments and runs to over 1,000 pages.
By this application, Mr Lee seeks to restrain the State Solicitor's Office from further acting for the defendants in this action, on the basis that the solicitors of that office would not be able to conduct themselves with the necessary objectivity.
In essence, Mr Lee centres his argument in support of this application on the circumstances which surround the prosecution of a company which operated on Rottnest Island, being Abellio Pty Ltd, the lessee of the Rottnest Bakery. I referred to this entity at [10] above. It appears that, in 2014, Abellio Pty Ltd was successfully prosecuted for breaches of the health and food legislation, which led to a significant fine being imposed on that business. The prosecution was run by the State Solicitor's Office, on behalf of the Department of Health.[33]
[33] The identity of the agency is addressed in Mr Lee’s Application to Re-open, however, nothing turns on this issue in my view.
Mr Lee has explained in his affidavit and submissions that there was, in his view, an improper failure on the part of the Department of Health to enforce the fine which was imposed on Abellio Pty Ltd.
At or around the same time, Kingsfield was also prosecuted for breaches of the health and food legislation, and found guilty. A modest fine was imposed on Kingsfield, which I understand it paid.
The disparity between these outcomes, in the sense that Abellio Pty Ltd apparently escaped actual payment of the fine imposed upon it while Kingsfield did not, coupled with various factual matters explained by Mr Lee in his submissions, has led Mr Lee to the conclusion that there was some impropriety involved.
Further and importantly, the involvement of the State Solicitor's Office in the prosecutions, and its apparent knowledge of the processes which should be followed upon a fine being imposed, is said by Mr Lee to support the conclusion that the solicitors of that office would not be able to conduct themselves with the necessary objectivity in acting for the defendants.
I have set out in Attachment A to these reasons various passages from the transcript of the hearing on 23 May 2024 which assist to explain the manner in which Mr Lee's contention is advanced.[34]
(2) Disposition
[34] ts 149ff (23 May 2024).
At the hearing on 23 May 2024, I heard oral submissions from Mr Lee and had the opportunity prior to the hearing to review his written submissions dated 10 November 2023 (Folio 144). Those submissions were apparently supported by Kingsfield (Folio 145),
It is clear that Mr Lee has firmly held subjective views on this issue, which arise from the asserted disparity in the treatment of Kingsfield relative to Abellio Pty Ltd, concerning the enforcement of fines against each of them. Mr Lee believes there is a connection between this circumstance and the defamation actions he brought against Mr Rutherford, and he considers the State Solicitor's Office has had such a close involvement in those prior circumstances that this Court should restrain those solicitors from acting.
To be clear, the position which is advanced by Mr Lee is based solely on conjecture and speculation. It is driven by his firmly held subjective opinions, but it is nonetheless nothing more than conjecture and speculation. Two short points should be made.
First, there is nothing in the material which is relied upon by Mr Lee in this regard which suggests that the State Solicitor's Office, or any agency, acted in some way improperly regarding the enforcement of the fines which were imposed on Abellio Pty Ltd.
Second, there is nothing in the material which is relied upon by Mr Lee which supports the contention that there are certain documents in existence which might support Mr Lee's concerns about the manner of the enforcement of the fines imposed on Abellio Pty Ltd, but which have not been disclosed, on one level, or which may have been concealed or destroyed, on a more serious level.
As to the disclosure of documents, Mr Lee has a tendency to focus on the proceedings in this Court before Archer J on appeal from the decision of the Information Commissioner under the Freedom of Information Act 1992 (WA).[35] Mr Lee misconceives the nature of those proceedings, and the appeal to the Court of Appeal which resulted therefrom. The contention, apparently advanced by Mr Lee, that the State Solicitor's Office or its client has a general discovery obligation in those proceedings, when those proceedings fundamentally concerned questions of law, is simply misconceived. I accept the submissions of the defendants in this regard.[36]
[35] Lee v Department of Health [2020] WASC 103 (Archer J) and Lee v Department of Justice [2020] WASC 105 (Archer J).
[36] Defendants' submissions in response dated 1 December 2023 [21] – [25] (Folio 152).
Fundamentally, I was not satisfied there was any reasonable basis to conclude there was any impropriety arising from the circumstances identified by Mr Lee which might justify the further conclusion that, unless restrained, the integrity of the judicial process would be impaired or undermined, adopting the language of Brereton J in Kallinicos v Hunt.[37] Indeed, I was not, and I am not, satisfied there was, or is, any reasonably arguable basis for the Court to restrain the State Solicitor's Office from acting for any of the defendants to this action
[37] Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 [76] (Brereton J).
It was for these reasons that I dismissed the Restraint Application.
G. Discovery Application
(1) Background
The Discovery Application was essentially brought in aid of the Restraint Application. By this application, filed on 5 March 2024, Mr Lee sought orders requiring the State to give discovery of documents of the following nature:
(a)documents concerning or relating to and revealing the date, the full name of the person and the name of the different agency that person was from who accessed the Abellio and or Kingsfield files between 2016 and 2018 inclusive;
(b)documents concerning or relating to the prosecution of Abellio Pty Ltd in the Fremantle Magistrates Court for the period from and including 16 April 2014 to June 2014;
(c)documents concerning or relating to health inspections of the Rottnest Bakery from and including January 2014 to April 2014; and
(d)documents concerning or relating to the mobile telephone used by a particular individual on 14 November 2013, including the contract of purchase or lease and the International Mobile Equipment Identity for the phone.
The application was supported by an affidavit sworn by Mr Lee on 5 March 2024 (Folio 165), and was heard on 23 May 2024. The affidavit attached the State Solicitor's Office briefing and engagement policy issued in 2018 and the DPP guidelines issued in 2022 (Folio 165).
(2) Disposition
Whether discovery should be ordered is ultimately a discretionary question. A proper basis must be identified by a moving party to secure discovery orders. In this instance, the discovery is not directed at obtaining material for the purposes of the issues arising in the substantive action itself but rather the discovery is sought solely in support of an interlocutory application.
I dismissed the application on 23 May 2024 having heard submissions from Mr Lee. I did so for essentially two reasons.
First, as the Discovery Application was brought in aid of the Restraint Application, and as I regarded the Restraint Application as having no reasonably arguable basis, I considered it would be wrong for the Court to make orders for discovery in apparent support of an unmeritorious interlocutory application. The pursuit of further documents was plainly a fishing expedition.
Second, quite apart from the lack of merit in the substantive application for which the discovery was sought, no proper basis was identified by Mr Lee to initiate a Discovery Application against the defendants to this action for the sole purpose of attempting to secure documents to be deployed by Mr Lee in support of his parallel Restraint Application.
Mr Lee had sought to explain in his written submissions,[38] and in his oral address, how the material in question might conceivably be relevant, but to no avail, in my respectful view. As with the Restraint Application itself, Mr Lee's Discovery Application was based solely on conjecture and speculation. It is unnecessary to detail the full extent of Mr Lee's explanations.
[38] Submissions dated 10 November 2023 (Folio 144).
H. Recusal Application
(1) Background
Mr Lee has sought orders that I should recuse myself as the Judge assigned to manage this action and, presumably, not determine the pending applications, including the State's application to dismiss the action, or make further substantive orders in the action.
The application was originally foreshadowed by Mr Lee by way of a unilateral, ex parte email sent to the Court on 19 July 2024.[39] That was more than 12 months after I had determined Mr Lee's application to proceed under the Bankruptcy Act and after Mr Lee has engaged several appeal processes to the Court of Appeal and to the High Court.
[39] Email from Mr Lee to the Court on 19 July 2024 at 9.55am, attaching a letter.
Following Mr Lee's email communication, the Court directed that a formal application be filed. Due to the nature of the request, I considered it appropriate for Mr Lee to file a formal application by chamber summons to be supported by an affidavit. It was also apparent that the defendants in the action had not been included in the email to the Court sent by Mr Lee.
On 26 July 2024, I directed my associate to reply to the parties in the following terms:[40]
It appears this email [being Mr Lee's email of 19 July 2024] was not provided to the other parties in this matter. This is evident from paragraph 46 of the attached letter. His Honour would make the observation that it is not appropriate for unilateral communication to be sent to the court. Therefore, a copy is now attached for the attention of the defendants. In substance the letter from Mr Lee asserts there is a reasonable apprehension of bias on his Honour's behalf.
Whilst it is not necessary in every case for a formal application to be made seeking orders of the Court, it will be necessary for Mr Lee to file an application and proper supporting documents, such as an affidavit. At the very least, the necessity for a formal application follows from the nature of the matters contained in Mr Lee's letter and the fact his Honour is presently reserved in the proceedings following the hearing on 23 May 2024 seeking orders to dismiss the action. Mr Lee should also clarify which 'matters' before the Court are the subject of the proposed application.
On filing the proper application, a hearing will be listed to hear the matter, with notice provided to the defendants.
[40] Email from the Court to the parties dated 26 July 2024 at 7.23am.
The Recusal Application was formally filed on 9 August 2024. It was opposed by the defendants.
At that time, and now, a separate proceeding involving Mr Lee and another party had been heard, and was being managed, by me (CIV 2167 of 2021). I considered it appropriate to inquire whether Mr Lee intended the Recusal Application to affect this matter as well. Mr Lee explained in writing to the Court that a recusal in respect of that other matter would not be necessary and was not sought.
The Recusal Application was first heard on 3 October 2024. The parties addressed the Court on that date for more than a full day. The hearing was adjourned, in part, to await the determination by the Court of Appeal of the appeals which had been filed by Mr Lee against prior decisions of mine. I made directions to permit the filing of additional affidavit material and submissions after the hearing.
As I have noted above, the Court of Appeal dismissed Mr Lee's appeals on 22 November 2024 and published their reasons on 26 November 2024.[41]
[41] Lee v Brandis [2024] WASC 150 (Vaughan and Hall JJA).
The further argument on the Recusal Application was then completed on 17 December 2024. I reserved my decision at the conclusion of that hearing. These are my reasons for disposing of the application.
(2) Materials before the Court
The Recusal Application was supported by the affidavits sworn by Mr Lee on 8 August 2024 and 10 October 2024.
The parties filed detailed submissions in relation to the Recusal Application, being the primary submissions of Mr Lee dated 23 August 2024, the defendants' submissions dated 9 September 2024, and Mr Lee's submissions in reply dated 22 September 2024.
A further set of submissions was filed by Mr Lee on 3 December 2024, with a list of authorities and a copy of the State Solicitor's Office model briefing policy also provided to the Court on the day prior to the hearing. The Court marked the briefing policy for identification following objection by the defendants to the document being received, and doubts being raised as to its provenance. Ultimately, I have concluded it is appropriate for the Court to receive the document in support of the Application, but the contents of the document add little to the arguments otherwise presented by Mr Lee.
(3) Bases for the Recusal Application
The Recusal Application proceeds on the contention that a reasonable apprehension of bias is said to arise from a number of events in the procedural history of this action (and the other actions involving Mr Lee which were heard on 5 July 2023). These events are detailed in the affidavit evidence sworn by Mr Lee, and in his submissions.
It is convenient at the outset of these reasons to summarise the essential bases for the Recusal Application, and the grounds of opposition advanced by the defendants. In summary, the matters relied upon by Mr Lee are as follows, which will need to be considered in isolation and in combination with each other:
(a)the decision to refuse Mr Lee's adjournment on 29 May 2023 and to determine the pending applications on the papers;[42]
(b)the approach adopted by the Court in relation to the failure by the State Solicitor's Office to appear at the directions hearing on 7 September 2023 and the approach adopted at the hearing on 28 September 2023;[43]
(c)the approach adopted by the Court in making orders on 13 October 2023;[44]
(d)the approach adopted by the Court to the late filing of submissions by the defendants on 1 December 2023;[45]
(e)the position of the Court in relation to the affidavits filed by the defendants in support of its want of prosecution dismissal application;[46]
(f)the approach adopted by the Court in relation to Mr Lee's contention that the State had breached the Harman undertaking in providing documents to the liquidators of Kingsfield;[47] and
(g)Mr Lee's contention that I lacked familiarity with the matter at the hearing on 23 May 2024.[48]
[42] Submissions dated 23 August 2024 [6] – [27].
[43] Submissions dated 23 August 2024 [28] – [40] and [41] – [46].
[44] Submissions dated 23 August 2024 [47] – [51].
[45] Submissions dated 23 August 2024 [52] – [55].
[46] Submissions dated 23 August 2024 [56] – [68].
[47] Submissions dated 23 August 2024 [69] – [76].
[48] Submissions dated 23 August 2024 [77].
As indicated above, each of these factual matters should be considered in isolation, but then also considered in totality in order to assess their significance and whether, taken together, these matters support Mr Lee's contention. Mr Lee says it is the cumulative impact or effect of these matters upon which he relies.
As will be evident from these brief descriptions, the foregoing are all matters of an interlocutory nature, concerning procedural steps in the action. Each of these matters also occurred well before Mr Lee raised any contention of a reasonable apprehension of bias, which he first identified by email on 19 July 2024.
The defendants' position in response to these contentions, in addition, to Mr Lee's lack of standing, is that that the events described by Mr Lee do not satisfy the common law test for apprehended bias. In any event, the defendants submit that by continuing with the proceedings well after the events complained of, Mr Lee has waived any right to bring the Recusal Application.
(4) Disposition – whether a reasonable apprehension of bias
The applicable test to assess whether there is a reasonable apprehension of bias was restated by Quinlan CJ in Ogbonna v CTI Logistics:[49]
[9]In relation to the former [that is, the test for apprehended bias], the test to be applied in determining whether I should recuse myself by reason of a reasonable apprehension of bias is well established. A judge is disqualified if a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.
[10]In applying this principle, it is necessary to identify what is said might lead a judge to decide a case other than on its legal or factual merits, and to articulate a logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The test is objective and the fair minded observer taken to be reasonable and to remember that the person being observed is a professional judge whose training, tradition and oath or affirmation require him or her to discard the irrelevant, the immaterial and the prejudicial. (footnotes omitted)
[49] Ogbonna v CTI Logistics [2021] WASCA 21.
In support of the above passages, Quinlan CJ cited the statements of principle expressed by Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy,[50] as follows:
[6]Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.
[7]The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.
[8]The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed. (footnotes omitted)
[50] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 (Ebner).
These statements were recently reiterated in the unanimous decision of the High Court in Charisteas v Charisteas.[51]
[51] Charisteas v Charisteas [2021] HCA 29; (2021) 273 CLR 289 [11] – [18] (Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ).
I will apply these principles in assessing Mr Lee's Recusal Application, while noting the observation of Tottle J in Barnel Investments Pty Ltd v Conceptual Technologies Pty Ltd,[52] following his Honour's review of relevant authorities, that the application of the fair-minded lay observer test 'involves a value judgment which is to a significant extent an intuitive judgment not readily susceptible of close analysis'. I turn now to the individual issues which have been raised by Mr Lee.
Refusal of adjournment on 31 May 2023
[52] Barnel Investments Pty Ltd v Conceptual Technologies Pty Ltd [2022] WASC 8 [25] (Tottle J).
As to the adjournment refusal identified at [88(a)] above, the adjournment sought concerned the combined hearing of four actions, being the present action as well as CIV 2011 of 2022 (in which the State was the defendant), GDA 7 of 2022 (an appeal from the SAT, in which the Pharmacy Board of Australia was the respondent), and GDA 10 of 2022 (another appeal from the SAT, in which Health Support Services was the respondent).
Mr Lee grounds his application for recusal by first challenging or criticising the decision to refuse him an adjournment on 31 May 2023, as set out in the reasons which were published, and then drawing comparisons with the manner in which I dealt with the failure by the State to appear at the directions hearing on 7 September 2023.
As to the refusal of the adjournment, this must be seen in the full context of the factual circumstances. Those circumstances are detailed in the reasons I delivered on 31 May 2023, in refusing the adjournment.[53]
[53] Lee v The State of Western Australia [2023] WASC 182 (Lundberg J).
In particular, it should be observed that sequestration orders had been made in relation to Mr Lee on 3 November 2022, and orders had been made to list four separate actions in which Mr Lee was involved for hearing before me on 1 June 2023, to address the issues arising under the Bankruptcy Act, which Mr Lee had sought to raise.
As set out in the reasons, Mr Lee provided a vague explanation for his inability to attend Court on 1 June 2023, did not confer with the other parties beforehand and, in fact, did not expressly seek an adjournment. In the reasons, I noted as follows:
[10]The email received from Mr Lee did not expressly request an adjournment of the hearing. As Mr Lee is a legal practitioner, I infer he would be well aware of the correct approach to follow in order to seek an adjournment and the need to properly justify such a request. Nonetheless, despite the lack of an express request for an adjournment, and in fairness to Mr Lee, I proceeded on the basis that Mr Lee's email and attached certificate constituted an informal application to adjourn the hearing of all of the matters presently listed for 1 June 2023.
A detailed response was sent to Mr Lee by my associate on 29 May 2023 requesting further explanation be provided. Limited material was provided. I also attempted to explore whether a remote hearing could be held to assist Mr Lee, given the fact four actions had been listed for hearing on the date in question.
Ultimately, I determined that the issues concerning the Bankruptcy Act should be determined on the papers. I noted that it would not be appropriate to proceed with an oral hearing in the absence of Mr Lee. In forming these views, I observed that Mr Lee had taken a 'perfunctory approach' to this own adjournment application by providing additional information on a 'drip fed' basis. I gave little weight to Mr Lee's explanations, and assessed there as being prejudice to the other parties by further delays and costs in the matters.
In part, Mr Lee complains of the use of the phrase 'adjournments are not simply available for the asking', which appears at [20] of the reasons. That phrase is borrowed from Kirby J's decision in Greer,[54] and is a phrase often cited in decisions addressing adjournments. The phrase was not a pointed reference directed to Mr Lee. The language elsewhere deployed in the reasons is firm but fair, and reflected the circumstances before the Court.
[54] Greer (1992) 62 A Crim R 442, 448 (Kirby J).
In this regard, I concluded:
[39]As I perceive it, amongst the prejudice likely to be suffered by these parties is the overall delay in the proceedings but, more importantly, in my view, there is the impact of additional costs to those parties by having the hearing adjourned to a further date. I can readily infer that the shifting of a court hearing date to a later date (as a result of a late adjournment application) will involve additional inconvenience to the parties and a likely increase in their legal costs. Given Mr Lee is presently an undischarged bankrupt, he is likely to be unable to satisfy any substantial costs orders made against him in favour of the defendants/respondents. There is real and compounding prejudice to the defendants/respondents in deferring this issue to a later hearing, which will require their solicitors to freshly prepare for that adjourned hearing.
[40] There is also a prejudice to the court occasioned by an adjournment such as the present. That is to say, there is a public interest in the efficient use of the court's limited resources. I agree with the defendants/respondents that this is a relevant issue in assessing the adjournment application. The court should be astute to ensure that its limited resources are not wasted by reason of late adjournment applications and recognise that the inefficient use of the court's time has an indirect effect on other litigants seeking to avail themselves of the court's facilities and processes.
[41] My assessment is that an adjournment of the listed hearing would occasion significant prejudice to the defendants and respondents by reason of the delay and additional costs, and also prejudice to the court by reason of the inefficient use of the court's resources. The prejudice which arises in these respects outweighs any particular prejudice to Mr Lee by reason of a denial of an oral hearing (bearing in mind that the prejudice arising from the absence of an oral hearing impacts all parties equally).
The question whether to grant an adjournment is fundamentally a discretionary one. The refusal of the adjournment in this instance is explained in the detailed reasons delivered on 31 May 2023, and resulted in the hearing being vacated in favour of a determination on the papers. The circumstances outlined in those reasons rationally support the decision.
Mr Lee filed an appeal against the refusal of the adjournment and my decision to hear the matter on the papers (CACV 59 of 2023). That appeal was discontinued by him on 12 June 2023.
Subsequently, on 5 July 2023, I published reasons for determining the Bankruptcy Act questions in the four proceedings.[55] Mr Lee appealed that decision to the Court of Appeal.[56] That appeal was dismissed.
[55] Lee v The State of Western Australia [No 2] [2023] WASC 247 (Lundberg J).
[56] CACV 87 of 2023 and CACV 88 of 2023, which were filed on 20 July 2023 and dismissed by the Court of Appeal on 24 November 2023: Lee v The State of Western Australia [2023] WASCA 165 (Vaughan and Hall JJA).
I cannot discern any basis apparent from the circumstances or the reasons published by the Court on 31 May 2023 to support the Recusal Application. The discretionary decision to refuse an adjournment was not only open on the materials, but a logical and rational determination consistent with established principle to determining adjournment requests and which ultimately only deprived Mr Lee of an oral hearing, which all parties to the combined actions were also deprived.
A fair minded observed would recognise this and not conclude that I had formed final adverse views as to Mr Lee's credit, or in any substantive sense, or that it might be possible I would not bring an impartial mind to the resolution of the Mr Lee's claims, whether as to the interlocutory issues addressed in the decision published on 5 July 2023 or as to the substantive issues in the action.
Hearings on 7 and 28 September 2023
Next, Mr Lee seeks to draw parallels between the foregoing adjournment request and the approach adopted by the Court on 7 September 2023. At the directions hearing on 7 September 2023, there was no appearance by counsel for the defendants. That date had been set in July 2023 by the Court for a directions hearing. The primary question for consideration at the hearing was the issue whether the action should be dismissed given the determination made by the Court on the Bankruptcy Act issues, or remain stayed.
The transcript of the proceedings on that date reveals:
(a)As there was no appearance by the State, I stood the matter down and had enquiries made with the State Solicitor's Office through my associate.
(b)The hearing was called back on after a short adjournment, at which point I noted that the Court had been informed through my associate that the representative of the State was on parental leave.[57] I indicated I was reluctant to proceed in his absence. I had the following brief exchange with Mr Lee at that point:
[57] ts 63 (7 September 2023).
LUNDBERG J: … I'm reluctant to proceed today. I appreciate there's some inconvenience for you in having come along today. My inclination is not to try to have this matter dealt with on the papers by having people file documents. It feels to me it's a little easier to have the matter brought back on for some brief submissions say in a week or two weeks just so we try and dispose of it there and then. But do you have a particular view or some personal inconvenience or are you away, things of that nature?
LEE, MR: Well, yes, your Honour.
LUNDBERG J: Yes.
LEE, MR: The 2660 matter is subject to a Court of Appeal decision.
LUNDBERG J: I understand.
LEE, MR: Subject to that.
LUNDBERG J: Yes.
LEE, MR: And so my view would be to await the outcome of the Court of Appeal finding and then proceed after that. The second thing is that the orders made, even if they were to continue, would be binding on the trustee because they relate to the trustee. They don't relate to me personally. So the State is with respect to the trustee but the cause of action survives. That goes on. So I would be – I would be seeking that the orders be – without trying to put too many arguments here. But I would just be seeking that the orders be that – if also unsuccessful in the appeal, then simply that the stay is in place. There's basically no need to proceed with dismissing the action which is the opinion, let me say, of the Court of Appeal in other cases which I've got here. But I probably – it's probably not – I can refer those to you but I'm not sure it's worth - -
(c)I adjourned the matter until 28 September 2023 for a further directions hearing. I reserved the costs of the day.
(d)Mr Lee did not expressly oppose the adjournment, nor seek the costs of the hearing.
The matter was brought back on for directions on 28 September 2023. At that hearing, Mr Olynyk appeared and apologised for his previous non-attendance. Mr Olynyk indicated on transcript that he had apologised to Mr Lee outside of Court as well.[58] I accepted Mr Olynyk's apology.
[58] Ts 73 (28 September 2023).
Mr Lee complains that Mr Olynyk gave a perfunctory apology, and failed to file an affidavit by way of explanation. Further, Mr Lee says that I adopted a different approach in dealing with the issue relative to the manner in which I addressed the adjournment request made by Mr Lee in May 2023. Mr Lee's complaints in this regard were not made at the time, and have only been developed months after the event. The issues raised by Mr Lee ought to have been raised by him at the time.
In reality, as appears from the transcript of the proceedings on 7 and 28 September 2023, there was no objection by Mr Lee to the adjournment and no issue taken by him to the failure of Mr Olynyk to swear an affidavit by way of explanation. The circumstances which presented themselves on 7 and 28 September 2023 were fundamentally different to those which arose in May 2023, where Mr Lee sought an adjournment (or at least I took the position of Mr Lee to be a request for an adjournment) of a substantive hearing, which was opposed by the other parties.
The transcripts of the proceedings on both 7 and 28 September 2023 reveal that Mr Lee was content with the adjournment of the matter given he had pending appeals on foot against the decision of the Court made on 5 July 2023.
There would be nothing apparent to a lay observer from the events on 7 and 28 September 2023 which would provide any rational basis for the Recusal Application. The fair minded observer of the proceedings, aware of the matters outlined above, would not, as a matter of possibility, conclude that I would adopt an adverse view in relation to Mr Lee for this reason and not bring an impartial mind to the resolution of the question I was required to decide.
Ultimately, I consider that the submissions made by the State as to the comparison between the adjournment events were very sound. Mr Olynyk drew the Court's attention to the various distinctions between the adjournment which was refused in May 2023 and the manner in which the court dealt with his failure to attend Court at the hearing in September 2023.
In simple terms, and to reiterate what I have earlier said, the former matter concerned a substantive listed interlocutory application, being an application pressed by Mr Lee in four different matters which required three sets of parties (and two law firms) to be available for a hearing.
Additionally, Mr Lee's approach to the matter in May 2023 was undoubtedly perfunctory in the sense that he simply indicated he would not be attending Court in the first instance and until further pressed did not provide any substantive material and did not actually formally seek any adjournment from the Court. That also explains the relevance of my comment drawn from Greer that adjournments are not simply available for the asking.
The position adopted by the Court was to ensure the matter was not inefficiently dealt with in terms of the Court's resources and to ensure, to the extent possible, the costs burden that fell upon the parties would fall equally. In the result, the Court's decision to have the matter heard on the papers occasioned no prejudice on Mr Lee in the circumstances and, although not directly relevant to the recusal question, it cannot be asserted the decision was wrong bearing in mind the decision of the Court of Appeal and the determination by the High Court that special leave ought be refused.
What is important is the relevant comparison between the adjournment of the listed special appointment in May 2023 and the failure by the State to appear at a directions hearing in September 2023, which would be apparent to the lay observer. The comparison is quite stark.
Indeed, when the transcript is examined, it would be apparent to the lay observer that Mr Lee himself was content for the matter to be adjourned in September 2023 because of the pending Court of Appeal matters.
The lay observer would have noted that Mr Lee adopted the position at the time that it was appropriate for the matter to be adjourned and that he sought no order requiring an affidavit to be filed by the State. The lay observer would regard that as inconsistent with Mr Lee's stance on the Recusal Application. The decision of the Court to allow the matter to be adjourned would not be viewed by an objective bystander as being an example of differential treatment by the Court of the two parties.
Further, in those circumstances, it does not sit well in Mr Lee's mouth to now say that the Court ought to have insisted that the State provide an affidavit to explain its failure to appear. The Court is not obliged to require an affidavit be filed in circumstances where there is no contentious point which necessitates sworn evidence being adduced. The position is quite different where a party is seeking to adjourn a listed hearing against the opposition of the parties. The lay observer would recognise these matters.
To complete the chronology of events, on 28 September 2023, directions were made by the Court to list the matter for a directions hearing on 5 October 2023, and to program the filing of further applications and submissions (Folio 129).
On 5 October 2023, directions were made by the Court to program applications by Mr Lee and to extend the programming directions made on 28 September 2023 (Folio 131).
Orders made on 13 October 2023
A memorandum of consent orders was then filed by Mr Lee on 10 October 2023, seeking to vary the directions that had been made by including directions for the filing of submissions and affidavits. The memorandum was signed by all parties.
On 11 October 2023, I directed my associate to provide the parties with draft orders giving effect to the consent orders. The email from my associate, which was sent on 11 October 2023, stated:
Dear Parties
I refer to the above matter and the email from Mr Lee received yesterday.
His Honour proposes to make the orders which are attached, to ensure the timetable is clear to all parties ahead of the hearing on 21 December 2023. The attached orders are in draft only. Please advise whether this timetable reflects the parties' intentions.
Once I have your response I will proceed to finalise the orders.
On 12 October 2023, separate emails were received from Mr Olynyk, Mr Lee and Mr Camp for Kingsfield indicating the orders were agreed. However, further emails arrived after that point in time which raised additional matters.
Mr Camp emailed the Court to request the addition of some wording to proposed order 6. My associate responded to Mr Camp to confirm the wording in question was already contained within the draft order the Court had circulated. Mr Lee then emailed my associate at 2.54pm on 12 October 2023 to request an amendment to order 6 in the following terms:
Dear Associate
Please see the following proposed amendment to Order 6.
By 4.00pm on 1 December 2023, the Plaintiffs are to file and serve any submissions and affidavits in response to the defendants' submissions and affidavits "including any further submissions and affidavits with respect to the security for costs application" [the quoted passage was highlighted in the email] and in relation to the further progress and management of the action.
I have not conferred with Mr Olynyk but I propose to do so on this proposed amendment and all the applications tomorrow when convenient for Mr Olynyk.
I understand Mr Camp has no objection.
My associate responded to the parties at 3.43pm on 12 October 2023 to indicate that the Court would await their response on 13 October 2023.
At 4.04pm[59] on Friday, 13 October 2023 (that is, after 4.00pm), not having heard from the parties, I proceed to finalise the orders which had been proposed by the parties (see Folio 133, dated 12 October 2023 but in fact made on 13 October 2023). As part of this Recusal Application, Mr Lee raises a concern as to the decision I took to finalise these orders on 13 October 2023, having given leave to the parties to confer prior to finalising those orders.
[59] The time is evident from Mr Lee's indication on transcript as to when he was informed of the orders.
Mr Lee responded to the Court at 4.31pm on 13 October 2023 in the following terms:
Dear Associate
Please let his Honour know that conferral with Mr Olynyk and Mr Camp finished slightly after 4pm but not before his Honour made orders in this matter.
I apologise for the delay in getting back to you and his Honour on the proposed orders.
These circumstances would indicate to the lay observer that the Court gave all of the parties ample opportunity to comment on the draft orders, which had been prepared by consent, which all parties initially indicated they agreed, and which were subject to a potential variation which the Court permitted the parties to further confer about, for a reasonable period. The orders were then made by the Court.
There is nothing I can detect in these circumstances which provides any rational basis for Mr Lee's Recusal Application.
Late filing of the State's submissions on 1 December 2023
The next circumstance concerns the late filing of submissions by the State on 1 December 2023. The Court had ordered on 12 October 2023 that the State file submissions by 4.00pm on 1 December 2023. The State filed its submissions at 4.39pm that day. Mr Lee emailed the Court the following Monday, 4 December 2023, in the following terms:
Dear Associate,
I refer to the email below from Mr Olynyk which was received by me at 4.39pm on Friday, 1 December 2023.
I note that you were not copied into this email from Mr Olynyk.
The submissions were filed in breach of the orders made by his Honour on 12 October 2023.
The Defendants had ample opportunity to comply with these orders and I submit on behalf of the Second Plaintiff that the applications by the Defendants be summarily struck out.
As you are aware this followed a breach of directions made on 18 July 2023 concerning the hearing on 7 September 2023 which Mr Olynyk failed to attend and which required the directions hearing to be adjourned to 28 September 2023.
Mr Lee sought that the defendants' application be summarily struck out by reason of the late filing of the submissions. I did not entertain that application.
The late filing of the submissions by the State was regrettable and should not have occurred. The delay of 39 minutes was, however, not significant in the overall context of the proceedings, and bearing in mind the hearing was listed for 21 December 2023. Mr Lee's proposal to strike out the application on the basis of the delay of 39 minutes was quite extreme. A lay observer informed of these matters would recognise the extreme nature of Mr Lee's position.
There is nothing in these circumstances which justifies or supports Mr Lee's Recusal Application, in my view.
Defendants' failures to file affidavits
Mr Lee advances various submissions about the failure by the defendants to swear affidavits in support of the defendants' dismissal application. This is then connected by Mr Lee to the Court's failure to require Mr Olynyk to file an affidavit in relation to the hearing on 7 September 2023 and the apparent failure of the Court to require that the third defendant file an affidavit to explain his ill health. Mr Lee's submissions at [56] to [68] of his outline dated 23 August 2024 do not advance any rational basis to support the Recusal Application in my view. I have dealt with the circumstances of the 7 September 2023 hearing already.
As to the filing of affidavits by the defendants, that was a matter for them to assess and determine. It was not a matter for the Court to require that specific affidavits be filed by these parties in relation to the dismissal application. If a party fails to file an affidavit in support of its application, inferences may be drawn in all the circumstances. The fair minded observer would understand these matters.
As it happens, the defendants filed an affidavit sworn by Mr Brandis, the fourth defendant, and an affidavit sworn by a current officer of the Rottnest Island Authority, Ms Davis. There is no rational comparison to draw between the defendants' decision to refrain from filing an affidavit sworn by the third defendant and the Court's requirement that Mr Lee file an affidavit to support his adjournment request. The lay observer would appreciate these matters, and would not reasonably apprehend that I might not bring an impartial mind to the determination of Mr Lee's claims.
Hearing on 21 December 2023
I next turn to the hearing on 21 December 2023 and the contention by Mr Lee that the State had breached the so-called Harman undertaking, more commonly now referred to as the obligation not to make improper use of documents as explained in Hearn v Street.[60]
[60] Hearn v Street [2008] HCA 36; (2008) 235 CLR 125.
The circumstances surrounding this issue are summarised below.
At the hearing on 5 October 2023, the plaintiffs raised the capacity in which Kingsfield was named as the first plaintiff in the proceeding, submitting that Kingsfield should be named in its capacity as the trustee of the Lee Family Trust.
On 21 November 2023, liquidators were appointed to Kingsfield.
On 29 November 2023, Kingsfield filed an application to substitute Kingsfield in its capacity as a trustee, as the first plaintiff in this action.
On 13 December 2023, the Court received a unilateral email from the liquidators requesting access to all filed held by the Court in relation to this action. The liquidators asked for advice as to the relevant steps to be taken to grant access.
On 14 December 2023, I directed my associate to respond to all parties including the liquidators to note that the matter was listed for a hearing at 10.30 am on 21 December 2023 and that I requested the parties 'confer as to the effect on the scheduled hearing of the appointment of liquidators to the plaintiff'.
On 15 December 2023, Mr Lee responded to the Court as follows (and Mr Camp subsequently emailed the Court to voice his support):
Dear Associate,
I refer to the email below.
The email from Mr Crevacore was sent in circumstances where no application was made by the liquidators of Kingsfield Holding Pty Ltd, notwithstanding that they would have been aware that they are no longer the Trustee of the Lee Family Trust and where there is a current application by Mr Camp on behalf of the Trustee that the writ be amended to reflect the new Trustee before the Court.
There was no conferral with respect to this request by Mr Crevacore.
In the absence of any application I oppose the liquidators access to Trust documents where it has not put any affidavit evidence before the Court and it has not been determined if it is a proper party to the proceedings.
I am unsure if Mr Camp is available today.
Also could you please let me know if the Court will consider the dismissal of the applications filed by Mr Olynyk in breach of the orders made by his Honour.
On 18 December 2023, the liquidators wrote to the parties and the Court to confirm their appointment, and to note they had requested the books and records from the former director and solicitor and received no correspondence from either party. The liquidators noted they had received the court documents in this action from the State Solicitor's Office on 14 December 2023. The liquidators referred to s 500(2) and s 545 of the Corporations Act and expressed their opinion that the proceedings were stayed and sought additional time to ascertain the company's position and indicated their intention to liaise with the Court and the parties as to suitable next steps.
On 18 December 2023, Mr Olynyk emailed the parties and the Court to indicate that:
Whilst the defendants are keen to resolve this matter with finality, the defendants do not oppose the Liquidators being given some additional time to conduct their inquiries into the first plaintiff in light of the issues raised.
Mr Lee replied on 19 December 2023 as follows:
Dear Associate,
I refer to recent correspondence in this matter from Mr Olynyk and the Liquidator of Kingsfield Holdings Pty Ltd.
As Mr Olynyk is aware there is an application before the Court to remove Kingsfield from the record.
The liquidator and Mr Olynyk should both be aware that a company must act by way of a legal practitioner. No legal practitioner has been appointed to act for Kingsfield and yet the liquidator is corresponding directly with the Court. It is not appropriate in my view for such correspondence where Kingsfield claims to be a party but it is not represented.
I would request an urgent directions hearing to establish the next steps in the matter. I consider the hearing on 21 December needs to be vacated and affidavit evidence put before the Court by the Liquidator through its legal practitioner if he wishes to be involved in this matter.
Please let me know the Court's view.
On 19 December 2023, Mr Olynyk informed the Court by email that the liquidators and the defendants had conferred and agreed orders. The email stated:
Dear Associate
I refer to Mr Lee's email to the Court today and Mr Dominish's email below on behalf of the Liquidators of the first plaintiff.
The defendants and the Liquidators of the first plaintiff have agreed the following orders to allow the Liquidators to complete their inquiries into the first plaintiff:
1. The hearing listed for 21 December 2023 be vacated;
2. The hearing originally listed for 21 December 2023 be adjourned and relisted to the first available date after 8 January 2024; and
3. Costs be reserved.
The defendants understand from Mr Lee's email that Mr Lee also seeks the first order above. Mr Lee's position with respect to the second and third order is not yet clear.
As Mr Lee notes, the first plaintiff is not presently represented by a lawyer as required by O 4 r 3(2) and O 12 r 1(2) of the Rules of the Supreme Court 1971 (WA). Accordingly, even if the parties were in full agreement as to the terms of the proposed consent orders, it would not be possible for the parties to file a memorandum of consent orders properly executed on behalf of the parties in the manner required by O 43 r 16(1).
The defendants wish to enquire whether His Honour would be open to making the proposed orders in chambers or otherwise list the matter for directions.
Alternatively, if His Honour is inclined to maintain the hearing date listed for 21 December 2023, the defendants remain ready to proceed as per the current timetable.
I would be grateful if you could bring this email to His Honour's attention.
I informed the parties through my email on 19 December 2023 that I would be content to vacate the hearing subject to Mr Lee's views. Mr Lee responded by email at 12.06pm on 19 December 2023 in the following terms:
Dear Associate,
I refer to your recent email.
I seek an urgent directions hearing given that documents were provided by the SSO to the liquidators.
These documents were provided to the liquidators notwithstanding there was an application before the Court for amendment to the writ and the Court had not ruled on this. I refer to the email from you dated 18 December 2023, an email from Mr Crevacore dated 18 December 2023 and the application by Mr Camp.
In my view this may constitute a breach of the Harman undertaking. Mr Olynyk should provide on affidavit what documents were provided and when to the liquidators, when he knew that the application was before the Court, and the Court had not ruled who was the proper Plaintiff.
As you are aware I have appealed the decision made concerning my leave to proceed in this matter to the High Court and Mr Camp acts for the Trustee.
If there has been a breach of the Harman undertaking then any documents in the Liquidators' possession and any investigations that are based on those documents may be tainted and there may be other ramifications.
In my submission this issue should be resolved before any further steps are taken and this is a reason why I consider a directions hearing should be held forthwith.
Please let me know his Honour's view.
The Court responded to the parties through my associate on 19 December 2023 as follows:
Dear Parties
I refer to the above matter and correspondence below.
The further communication from Mr Lee has been brought to the attention of his Honour. Unfortunately, his Honour is committed all day today in the Court of Appeal and has two hearings tomorrow. In any event, as the matter is listed for Thursday at 10.30am, and has been so listed for some weeks, his Honour's view is that the matter should remain listed for that date and time rather than seek to coordinate an earlier directions hearing. Given the email communications received from the parties, it would appear to be accepted that that hearing should be for directions only, rather than for the substantive determination of the applications.
The parties should further confer as to the orders they propose for that hearing, either by consent or by competing minutes, and provide any such minutes to the court as soon as possible.
On 20 December 2023, Mr Olynyk filed an affidavit deposing to the communications between the parties concerning the appointment of liquidators, and the communications with the liquidators. Within that affidavit, Mr Olynyk deposed that he had been informed by the liquidators on 14 December 2023 they did not have access to any documents in relation to the matter and so had not been able to form a position as to the upcoming hearing. Accordingly, Mr Olynyk then provided the liquidators with a copy of the documents to allow them to make a decision ahead of the hearing.[61]
[61] Affidavit of Stephen Olynyk sworn 20 December 2023 [12] (Folio 153).
At the hearing on 21 December 2023, I granted leave for one of the liquidators to appear. Mr Camp appeared for Kingsfield. Mr Lee and Mr Olynyk appeared as well. I summarised for the parties the matters which were in play, so to speak. The first matter I mentioned was that I considered it was important to understand how this action would continue given Kingsfield was in liquidation and its directors no longer had their previous powers to control matters.[62]
[62] ts 109 (21 December 2023).
I then stated:[63]
Secondly, Mr Lee is still the subject of sequestration orders and insofar as the second plaintiff was concerned, that is, Mr Lee, the reason this proceeding was coming back on, although it's acquired a life of its own since my last judgment, was really to assess whether it be stayed or dismissed. Those two issues are ones that I want to hear from the parties about.
[63] ts 109 (21 December 2023).
I then mentioned a third issue, the Harman undertaking issue. I informed the parties that I did not consider it an unusual step for a liquidator in proceedings to take steps to obtain documents from other parties to a proceeding, where they are not produced by the company itself.[64] I enquired of the parties as to whether there was authority on this issue and noted the following:[65]
…my provisional view would be that the provisions of documents by a defendant to the liquidator of a plaintiff is not in the territory that involves any transgression of the Harman undertaking. It is for the proper purpose of the mitigation [sic - litigation] or perhaps put another way, it is not for a collateral purpose. So I would be – I mention that so I can understand why there is a concern about the issue and what consideration has been given to that issue.
And what I might say is I will pause there and say the reason I'm making all those points at the outset before I hear from people is I'm concerned this is a proceeding that has the real potential to involve the incurring of great additional costs by all parties concerned, which I think is an outcome to be avoided, if possible, in circumstances where the two plaintiffs to the action are currently the subject of sequestration processes in an corporate and an individual sense, and it would be quite unusual and I would need some persuasion to be granting leave for parties to continue with actions in those circumstances, much less in the circumstances in which I've already prepared a judgment which deals with questions concerning the stay against the second plaintiff, and which I was interested to hear whether the action should be dismissed in its entirety.
[64] ts 110 (21 December 2023).
[65] ts 110 (21 December 2023).
The defendants oppose the Application to Re-open in the absence of any evidence of exceptional circumstances.[79]
(2) Disposition
[79] Memorandum of conferral dated 3 January 2025 under the hearing '2. Matters in dispute'.
In pressing the application to re-open, Mr Lee placed reliance on the decision of the High Court in Commonwealth Bank of Australia v Quade.[80] Quade involved a circumstance where the successful party had seriously failed in the performance of its own obligations and thereby created the difficulty in question.
[80] Commonwealth Bank of Australia v Quade [1991] HCA 61; (1991) 178 CLR 134 (Quade).
In particular, Mr Lee relied upon the observations of the Court in Quade at [7] and [8], after referring to the general rule, that the application of that general rule does not serve the demands of justice in the individual case or the public interest in the administration of justice generally in a case where the unavailability of the evidence resulted from a significant failure by the successful party to comply with an order for the discovery of relevant documents in his or her possession or under his or her control.
I have reviewed Mr Lee's affidavit and the submissions attached to Mr Lee's affidavit. It is significant that Mr Lee has not directly deposed in his affidavit to any circumstances which would warrant a re-opening of the previously determined applications. His submissions contains various matters of factual assertion not directly addressed in the body of the affidavit. I will, however, assume for the purposes of addressing this application, that the factual matters in the submissions could have been verified on affidavit. Even on this basis, the Application to Re-open must be dismissed for the following reasons:
1.The present circumstance is one in which the Court has already determined (and made final orders with respect to) the Restraint Application, the Discovery Application and the matters concerning s 60(4)(a) of the Bankruptcy Act. Indeed, the determination of the Court concerning the operation of s 60(4)(a), which were the subject of the Court's reasons on 5 July 2023, have since been the subject of appeals to the Court of Appeal. We are thus not presently dealing with a case in which the party is seeking to re-open proceedings following a trial but prior to judgment or the making of final orders. That does not mean an application to re-open is entirely unavailable, but it is important to assess the interests of justice question in this context.
2.The matters identified by Mr Lee would have no impact on the outcome of the various applications in the proceedings to which I understand this application is said to relate. The material identified by Mr Lee does not logically impact the application Mr Lee brought to restrain the State Solicitor's Office from acting, or the allied discovery application, nor does it rationally affect the Court's determination of the s 60(4)(a) issue. In substance, it is more material of the type already identified by Mr Lee, being little more than new skin on old bones, which on any view does not assist the determination of those applications or issues. The material remains hinged on speculation and conjecture, in my respectful view.
3.The matters identified by Mr Lee could all have been raised by him in the course of the earlier hearings, or through the appellate processes that Mr Lee has engaged over the past 18 months. I am not satisfied, even taking Mr Lee's submissions at their highest, that there is any proper explanation for these matters only being raised in January 2025.
4.To the extent to which the Application to Re-open may be taken as raising matters concerning the State's Dismissal Application, which is addressed in the next section of these reasons, there is simply nothing of material significance in the application which is germane to that application.
J. State's Dismissal Application
(1) Background
The State's Dismissal Application was filed on 16 October 2023 (Folio 135). The substantive order sought was that the action be dismissed for want of prosecution. This application was largely addressed by submissions from the parties at the hearing on 23 May 2024.
(2) Materials before the Court
In support of the application, the State filed outlines of submissions dated 28 September 2023 (Folio 128), dated 10 November 2023 (Folio 143) and an outline of submissions dated 1 December 2023 ( Folio 152). Mr Lee filed submissions in opposition on 1 December 2023 (Folio 151).
In support of the application, the State filed an affidavit from Mr Brandis sworn 2 November 2023 (Folio 140). Mr Brandis is the fourth defendant. Mr Brandis has deposed that he was employed by the Rottnest Island Authority between 2005 and 2010, and ceased to be employed by that authority in July 2010. Mr Brandis has deposed that he has a vague recollection of the meeting and discussions which are the subject of the pleaded allegations and has no specific recollection of any conversation with the third defendant in relation to the exchange of letters with the Chief Pharmacist which is the subject of the pleadings.
An affidavit was also sworn by Ms Peta Davis on 2 November 2023 (Folio 141). Ms Davis is the Director of Corporate Services at the Rottnest Island Authority. Ms Davis has set out in her affidavit a broad history of the proceedings, with a particular focus on the proceedings in the SAT, and attached various documents identified in the pleadings. Ms Davis has deposed that Mr Amaranti, the third defendant, left the Rottnest Island Authority in January 2017 and that of the nine other employees who were sent or copied into the relevant correspondence, only one remains at the Authority, and that person is an executive assistant.
An affidavit was also sworn by Mr Olynyk on 2 November 2023 (Folio 142), which provides an overview of the litigation history. Mr Olynyk has also attached the exchange of communications with Mr Lee in or about March 2023. In the course of that correspondence, the State Solicitor's Office emphasised to Mr Lee and his then solicitor that no steps had been taken in the matter since 27 May 2021, and raised a number of issues arising from the bankruptcy status of Mr Lee.[81]
[81] Affidavit of Mr Olynyk sworn 2 November 2023, Attachment SJO-16 (Letter from State Solicitor's Office to Michael Paterson & Associated dated 22 March 2023).
Mr Olynyk's affidavit included references to without prejudice communications, to which Mr Lee objected, and which I have disregarded.[82]
(3) The position of the State
[82] Following the interchange between counsel, the Court and Mr Lee on 23 May 2024, I ruled the without prejudice correspondence would not be admitted into evidence (ts 192-193).
The State's application, as initially articulated was, in essence, that the action should be dismissed on the basis that the plaintiffs' conduct in this matter, when considered as a whole, establishes there has been inordinate and inexcusable delay that is likely to cause serious prejudice or injustice to the defendants.[83] The State's submissions sought to invoke the inherent jurisdiction of the Court to dismiss the action for want of prosecution, applying the principles set out in authorities such as Hancock Family Memorial Foundation Ltd v Fieldhouse,[84] LPH Developments Pty Ltd (In Liq) (as trustee for LPH Developments Keegan Street Trust) v Jameson Moore Pty Ltd [No 4],[85] and Leighton v Garnham [No 4].[86]
[83] State's submissions dated 10 November 2023 [3].
[84] Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93; (2005) 30 WAR 398 [99] – [100] (Steytler P and Owen JA).
[85] LPH Developments Pty Ltd (In Liq) (as trustee for LPH Developments Keegan Street Trust) v Jameson Moore Pty Ltd [No 4] [2018] WASC 401 [39] (Smith J).
[86] Leighton v Garnham [No 4] [2016] WASC 134 [46] (Le Miere J).
The State submitted there had been a substantial delay in commencing and prosecuting the action, and that the pleadings concerned events alleged to have occurred between 2005 and 2009, which was around 14 to 18 years ago (now 16 to 20 years ago) and some 6 to 10 years before the plaintiffs in fact commenced the action. As early as 7 April 2021 and 28 May 2021, the State raised with the plaintiffs their concerns with the delays in the litigation.[87]
[87] Affidavit of Mr Olynyk sworn 2 November 2023, Attachment SJO-1 (Letters from State Solicitor's Office to Bayview Legal and to Michael Paterson & Associated dated 7 April 2021 and 28 May 2021).
The State submitted that the action had passed its 8th year and had not substantially progressed past the pleadings phase in that time, and 'remains nowhere near ready for trial in the foreseeable future'.[88] The State observed that for 22 months, between 27 May 2021 and 27 March 2023, no formal steps were taken in relation to the action by the plaintiffs.[89]
[88] State's submissions dated 10 November 2023 [11].
[89] State's submissions dated 10 November 2023 [13].
The State submitted there was a real risk that the passing of time would prejudice the defendants' ability to give evidence. The State submitted:
[27]With the passage of time, the recollection of witnesses and the ability for defendants to respond to evidence adduced by a plaintiff diminishes. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose. It is oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed.
[28] Given the passage of time since this date, it is likely that the plaintiffs' delay will prejudice the defendants' ability to give evidence. In the present case, the substance of the defendants' evidence at trial has not been filed by key witnesses for the defence. The surrounding circumstances to the relevant affidavits and correspondence at issue would need to be given.
[29] The fourth defendant ceased to be employed by the first defendant in June 2010.
[30]While the fourth defendant recalls the original lease to Kingsfield in 2006, the Brandis Letter, the Brandis Affidavit and searches for any records of the December 2005 meeting in October 2009, his recollection of these events is vague. This is the natural result of the plaintiffs' significant delay in commencing and prosecuting these proceedings. The plaintiffs had the opportunity to address these matters contemporaneously in the course of the second SAT proceedings, but failed to do so.
[31]The third defendant ceased to be employed by the first defendant in January 2017.
[32]The first defendant has identified that the majority of its employees who had any knowledge of the original lease to Kingsfield in 2006 are no longer employed by the first defendant.
The State also cited the following statement of Le Miere J in Leighton v Garnham [No 4], which is apposite in the circumstances:[90]
Prejudice is not confined to matters relating to the proper conduct of the defence. The litigation imposes a financial burden upon the defendants and stops them getting on with their lives. The personal consequences for defendants who are subject to a proceeding which is not properly prosecuted must be taken into account.
[90] Leighton v Garnham [No 4] [73] (Le Miere J).
As the application was developed by the State, and as appears from the outline of submissions dated 1 December 2023,[91] the State further submitted that the action should be dismissed having regard also to the insolvency status of the two plaintiffs. The State submitted that the resolution of this action with finality, by way of dismissal, was preferable to a stay of the action. Counsel for the State made submissions to this effect at the hearing on 23 May 2024.[92]
[91] State's submissions dated 1 December 2023 [4].
[92] ts 177 – 180 (23 May 2024).
As I apprehended the State's final position, it was that although the Court may proceed to determine the application for dismissal on the basis of want of prosecution, it was not necessary to do so given the basis for dismissal which arises from the bankruptcy of Mr Lee and the outcome that the trustee in bankruptcy has abandoned the proceedings. Counsel referred in this regard to the authorities cited in my earlier decision in this matter, Lee v The State of Western Australia [No 2][93] at [78] – [81], namely Moran v Minco Holdings Pty Ltd (in liq)[94] and Temsign Pty Ltd v Biscen Pty Ltd.[95]
(4) The position of Mr Lee
[93] Lee v The State of Western Australia [No 2] [2023] WASC 247.
[94] Moran v Minco Holdings Pty Ltd (in liq) [2022] WASCA 93.
[95] Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47 (Temsign).
Mr Lee has always maintained that the passage of time has worked no prejudice to the defendants, particularly given the detailed responses pleaded in the defence. Mr Lee submitted that the plaintiffs should not be deprived of the opportunity of having their action heard at trial.
Mr Lee has emphasised the failure by Mr Amaranti to file an affidavit in support of the dismissal application and invited the Court to draw a Jones v Dunkel inference in this regard.
Mr Lee submitted that:[96]
The claim of want of prosecution is not derived from the affidavit of the Fourth Defendant and there is no affidavit filed by the Third Defendant. It is submitted there is no basis to claim that the action should be struck out for want of prosecution from the affidavit of the Fourth Defendant and the failure of the Third Defendant to file an affidavit gives rise to the inference that his affidavit would not have assisted the Defendants
[96] Mr Lee's submissions dated 1 December 2023 [11].
Mr Lee acknowledged that the evidence of the defendants may not have been filed, but submitted that the defence demonstrates that substantial instructions must have been given by the third and fourth defendants already.
Further, Mr Lee submitted the fact that neither the third or fourth defendant are employed by the first defendant was irrelevant, as the fourth defendant was still a public servant available to the State and there was no indication by the defendants that the third defendant was no longer a public servant who was unable to give instructions.
(5) Disposition
In my respectful view, it is appropriate to determine the State's application for dismissal of the action on the basis developed by counsel at the hearing on 23 May 2024. That is to say, the application should be seen, primarily, as a question whether the action should be dismissed, in the alternative to maintaining the stay of the action, following the bankruptcy of the second plaintiff, Mr Lee.[97] It is unnecessary to approach the application solely as a question whether there has been a want of prosecution of the action by Mr Lee.
[97] This is the issue expressly raised in my reasons delivered on 5 July 2023 at [81] (Lee v The State of Western Australia [No 2] [2023] WASC 247) and which I raised with Mr Lee at ts 203 - 206 on 23 May 2024.
This pathway was followed by Wheeler J in Temsign.
Wheeler J explained her approach as follows, under the heading 'Effect of Abandonment':[98]
I would, with respect, follow the reasoning of Ipp J in Stobbart's case in drawing a distinction between a proceeding and the underlying cause of action. An abandonment of the former does not destroy the latter. It remains alive, and it is open, as I understand the authorities, to the trustee either to bring a fresh action based upon it or, on the annulment of the bankruptcy, to assign it to the bankrupts for them to prosecute, subject to the effect of any orders which may be made in these proceedings.
The question which then arises, as it did in Stobbart's case, is whether, as the result of the deemed abandonment of the action by the trustee, the plaintiffs' action should be dismissed, or whether the action should simply be stayed, and if so for what period the stay should operate.
The difference between this case and Stobbart's is that in the present case there is nothing before me to suggest that there is likely to be any early determination of the bankruptcy, and accordingly, a stay gives rise to the risk of substantial prejudice to the defendants. However, I think it is appropriate to give the parties the opportunity to address me in relation to this issue if they wish to do so, and I will hear from them concerning the appropriate form of orders in this case.
[98] Temsign (58) (Wheeler J).
Ultimately, Wheeler J dismissed the action in that case, having heard from the parties on the issue.
That is not say that the considerations which might justify the dismissal for want of prosecution are not relevant to the primary basis for dismissal which is now pressed. There is an overlap between these bases.
Fundamentally, though, the Court must have regard to the circumstance that Mr Lee is subject to sequestration orders, the trustee in bankruptcy is to be taken to have abandoned the proceedings, there has been no suggestion that the proceedings would be revived or further pursued by the trustee in bankruptcy, there has been no suggestion that Mr Lee has sought to annul his bankruptcy in any respect, and no suggestion that Mr Lee has sought an assignment of any of the causes of action from his trustee.
Against the foregoing, it must be recognised that a dismissal of the action would mean that any further action or claim by Mr Lee would be statute-barred, given the lengthy effluxion of time since the events in question occurred. That is a significant prejudice which would be suffered by the second plaintiff.
There are several examples in the authorities of instances where an action has been dismissed as a result of the bankruptcy of the plaintiff, having regard to all of the circumstances. Wheeler J's decision in Temsign is one example. I refer as well to the decision of Macknay DCJ in Yap v Bailiff,[99] where his Honour concluded as follows:
[99] Yap v Bailiff [2006] WADC 119.
[42] It would seem clear from the authorities that the deemed abandonment by a trustee of an action has been regarded by courts in Australia as giving rise to a right in the other party to seek a dismissal of the action, and that there is a discretion in a court to grant such relief.
[43] Alternatively, a stay can be granted.
[44] A number of criteria are suggested by the defendant here as being relevant to the exercise of discretion.
[45] Those include the merits of the action, the degree of any likelihood of annulment of the bankruptcy, the degree of any likelihood that the trustee will assign the cause of action to the former bankrupt, prejudice to the parties interests, whether fresh proceedings are time-barred, whether the parties are responsible for any delay and whether bankrupt has any prospects of meeting the costs of the other party.
[46] In the present case, and assuming the cause of action to be arguable, I consider that it is appropriate to still dismiss the same.
[47] In that regard there would appear no prospect of any revival, the Official Trustee having elected not to proceed with it, and the plaintiff not having any apparent prospect of obtaining an annulment of her bankruptcy.
[48] Further, there is also no apparent prospect of any assignment of the action to the plaintiff.
[49] In those circumstances, and although a further action by the plaintiff would be likely to be statute-barred through the effluxion of time, there would seem no point in preserving the action, as the plaintiff will not be able to resume the conduct of it, and presently has no standing, and I consider the action ought therefore be dismissed.
I respectfully agree with his Honour's analysis.[100]
[100] See also Voskuilen v Morrisset Mega Markets [2005] NSWSC 34 [9] and [14] (Gzel J); Muir v Angeles [2020] NSWSC 1056 (Hallen J).
The matters I have identified at [222] above provide a compelling basis, in my view, when seen in the overall context of the history of this proceeding, the lengthy delays, the current status of the action, the time required to progress the matter to trial, and the resulting prejudice to the defendants, to dismiss the action and bring finality to the proceedings, notwithstanding the result that any further action by the second plaintiff will be statute-barred.
I will accordingly dismiss the action.
K. Conclusion and orders
For the foregoing reasons, the following orders have been, or will be made, as the case may be:
(a)the action insofar as it is brought by the first plaintiff, Kingsfield, will be and is hereby discontinued;
(b)the Amendment Application was dismissed by order made on 23 May 2024;
(c)the Restraint Application was dismissed by order made on 23 May 2024;
(d)the Discovery Application was dismissed by order made on 23 May 2024;
(e)the Recusal Application will be dismissed;
(f)the Application to Re-Open will be dismissed; and
(g)the action insofar as it is brought by the second plaintiff, Mr Lee, will be and is hereby dismissed.
I will hear from the parties as to the further orders which should now be made, including as to costs.
ATTACHMENT A
Extracts from transcript of 23 May 2024
LEE, MR:The State's Solicitor – I've been involved in various disputes for a considerable period of time. It's the conduct during the course of that which resulted in my opinion in the State's Solicitor having a conflict of interest with respect to matters where it represented agencies of the State of Western Australia. And in this case, the State of Western Australia, which is a party to these proceedings. And why it should not be allowed to continue to act for the defendants in this action, because of the history in other matters which I say are connected as a result of the State's solicitor's involvement….
LEE, MR:And it goes back to the – with respect to Kingsfield and Abellio. Both were prosecuted under the Food Act for breaches of the Food Act. Abellio and what was said by the magistrate at the time, that it was the largest fine ever handed down; it was $100,000. Handed down in April 2014 and Abellio indicated at that time it could pay the fine. Shortly after that time, it sold the business. Or, about that time it sold the business to Marinel which is the owner of the general store in Rottnest Island. However, the fine imposed was then sent to the FER. But it wasn't sent to the FER for -
LUNDBERG J: That's the Fines Enforcement Registry?
LEE, MR:Yes. That's right, your Honour. It wasn't sent to the FER for enforcement purposes; it was sent there for management. And that's what normally happens. It's only when the Department of Health requires that the fine be enforced that it is enforced. Now, I discovered in 2018 that the fine had never been enforced. The $100,000 had lapsed.
LUNDBERG J: That's the fine against Abellio?
LEE, MR: Yes. And it couldn't be recovered, because Abellio went into liquidation in early 2015. So there's no chance of getting the money back. Now, I made inquiries with the Department of Health and with the – through the Freedom of Information Commissioner. And these are set out in my – in my attachments to my affidavit.
…
LEE, MR:…. But the substance is this: the fine was never enforced. The enforcement of the Abellio fine, the State's Solicitor acting in that. So they were aware that that $100,000 fine had been imposed. They were also aware of the procedure that normally follows the enforcement or the imposition of a $100,000 fine. They're aware of that procedure because the file normally after the imposition of the fine is returned to the agency if it can enforce fines. And the Department of Health can enforce fines and it knows it has to. And so it – it – I'm saying it must have returned that file so that the Department of Health could have done that. Now, I've got – the State's Solicitor would have been aware that that the claim by the Department of Health, the fine wasn't enforced because it didn't know it had a duty to enforce fines and it wasn't aware the fine was outstanding are completely false. They have to be. The – the process is files that returned to the Department of Health, the Department of Health know they have to enforce fines.
Department of Health knows there's a fine outstanding. In fact, there were numerous subpoenas sent during the course of the legal defamation action in which I point out and seek from the Department of Health the information regarding the repayment of the fine. They – they oppose that through the State's Solicitor and say that “Look, we don't think that's relevant to these defamation proceedings”. And my position at all times has been, of course, that the $100,000 wasn't enforced as a payment to the director of Abellio: Mr Rutherford. And he got a $100,000 grant given to him by nonpayment – by not having to pay the $100,000 fine which the Department of Health was well aware it had a duty to enforce; did not enforce it. The State's Solicitor's Office would be aware that the process is it goes back to the State's Solicitor's Office. So we reach now 2018 before Archer J and I'm seeking documents under a Freedom of Information application. That Freedom of Information application seeks documents concerning or relating to the enforcement of that fine; the $100,000 fine.
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LUNDBERG J: Let's assume everything you've just said is provable based on your affidavit. Does it come to this then: you say that the government officer who responded to your FOI application and said there were no records concerning the enforcement matters. Which was then the subject of an appeal - - -
LEE, MR:To the Court of Appeal.
LUNDBERG J: - - - to Archer J and then to the Court of Appeal beyond that - - -
LEE, MR:Yes. To the Court of Appeal on that point.
LUNDBERG J: Both of which were dismissed - - -
LEE, MR:On the basis that they didn't discover documents.
LUNDBERG J: Well, just on the basis that there was a statement made, there were no documents.
LEE, MR:Yes.
LUNDBERG J: What you then, I think, submit is that it is that conduct which – at its heart – has a lie behind it, you say, because Ms [redacted] who was the officer involved made a statement, you say, … can't be right. And that the SSO has had an involvement in those proceedings in opposing your applications for review of the FOI application. And thereafter that those matters demonstrate a sufficient lack of objectivity on the part of the SSO that the proper administration of justice would be interfered with if I were to allow the SSO to continue to act in this matter for these parties against you on the - - -
LEE, MR:Yes, your Honour.
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LEE, MR: - - - well, well it goes further than that, your Honour. It's a perversion of the course of justice.
LUNDBERG J: Well, that – that – well, just be careful - - -
LEE, MR:Before – well, well - - -
LUNDBERG J: - - - Mr Lee, that sounds a very strong statement.
LEE, MR:Well, what I'm saying, your Honour, is that the State's Solicitor's Office must have known that there would have been documents or should have known there would have been documents, because the fine was enforced. The fine was enforced meant – and so they had a duty under the House of Lords decision in Ellman. They couldn't just leave it to the State's Solicitor's Office to say “Oh, look, we can't find any – sorry, leave it to the Department of Health. So, we can't find it, there's nothing here”. Their duty is once they're aware that there must be documents because of the enforcement of the fine being registered with the Fines Enforcement Registry, there must have been documents. And they registered the Abellio fine after I informed that it was – informed them it was outstanding in 2018. They sent off documents to the Department of Health for the registration of that fine. Of course they couldn't recover it. But they knew that – that they – they straight away sent them off. They're claiming on the one hand they don't know anything about it, claiming nothing – no knowledge of the fine.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IR
Associate to the Hon Justice Lundberg
17 APRIL 2025
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