Lafferty v Waterton [No 3]

[2017] WASC 230

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   LAFFERTY -v- WATERTON [No 3] [2017] WASC 230

CORAM:   ALLANSON J

HEARD:   9 AUGUST 2017

DELIVERED          :   11 AUGUST 2017

FILE NO/S:   CIV 1855 of 2013

BETWEEN:   SUSAN JUANITA LAFFERTY

Plaintiff

AND

WILLIAM FRANK WATERTON AND MADELAINE PEGGY JUNGSTEDT IN THEIR CAPACITIES AS EXECUTORS OF THE ESTATE OF THE LATE PEGGY JUANITA WATERTON
First Defendant

WILLIAM FRANK WATERTON
Second Defendant

MADELAINE PEGGY JUNGSTEDT
Third Defendant

Catchwords:

Practice and procedure - Restraining a lawyer from acting - Need to maintain professional independence - Plaintiff's husband seeking to appear as counsel - Counsel's personal involvement in matters to be decided

Legislation:

Administration and Probate Act 1958 (Vic), pt IV
Legal profession Conduct Rules 2010 (WA), r 32, r 33(2)

Result:

Order made restraining counsel from acting

Category:    B

Representation:

Counsel:

Plaintiff:     Mr P Lafferty

First Defendant              :     No appearance

Second Defendant         :     Mr M N Solomon SC & Mr T J Carmady

Third Defendant            :     Mr M W Fatharly

Solicitors:

Plaintiff:     Philip Lafferty

First Defendant              :     No appearance

Second Defendant         :     Williams & Hughes

Third Defendant            :     Kott Gunning

Case(s) referred to in judgment(s):

Frigger v Mervyn Jonathon Kitay in his capacity as Liquidator of Computer Accounting & Tax Pty Ltd (in liquidation) [No 10] [2016] WASC 63

1. ALLANSON J:  Susan Lafferty commenced this action in 2013.  The action was set down for trial for four days from 9 August 2017.  From the time the writ was filed, the plaintiff has been represented by solicitors.  Senior counsel was instructed. 

2. The plaintiff's husband, Philip Lafferty, is a lawyer.  On 7 August 2017 the plaintiff filed a notice of change of legal representative.  Mr Lafferty came onto the record as solicitor for the plaintiff.  On the first day of trial Mr Lafferty appeared as counsel for the plaintiff.

Events at trial

1. After taking appearances, counsel for the third defendant immediately raised the issue of Mr Lafferty's participation.  Counsel submitted, in summary:

   (1)Mr Lafferty may be in breach of the Legal Profession Conduct Rules 2010 (WA) in acting in a matter where it would be difficult for him to maintain professional independence because of his connection with the plaintiff, and his indirect financial interest in the outcome of the case: see, in particular, r 32 and r 33(2).

   (2)Mr Lafferty's financial circumstances are directly relevant to issues arising in the plaintiff's claim.

   (3)Mr Lafferty has had direct personal involvement in meetings and matters that are the subject of evidence, including matters that will be referred to in evidence by defence witnesses.

2. The second defendant opposed an adjournment, but made no submissions on Mr Lafferty's position.

3. Mr Lafferty submitted that he understood the perception that he may be in breach of conduct rules, and understood the problems of acting, but that he would be careful not to transgress and 'exceptionally careful not to stray into areas which may cause me concern'. 

Background

1. The plaintiff is one of three children of the late William Waterton.  Mr Waterton died in Victoria in 2003, leaving real property in that State.  Probate of his will was granted in the Supreme Court of Victoria in 2004.  He left his entire estate to his widow, Peggy Waterton. 

2. In her statement of claim in this action, the plaintiff pleads that she was entitled to apply for an order for provision out of the estate of her father pursuant to pt IV of the Administration and Probate Act 1958 (Vic). She alleges that:

   (1)her father had a moral duty to provide for her maintenance and support; and

   (2) she is not and was not at the time of her father's death capable by reasonable means of providing for her maintenance and support.

3. The plaintiff pleads that she did not apply for a family provision order because her mother represented, in a letter to the plaintiff in 2004, that she would divide the property she had inherited from her husband and any assets of her own in equal shares between the three children.  There are several issues arising in the plaintiff's claim.  But the allegation that she suffered detriment by not pursuing a claim against the estate of her father is central to the plaintiff's case.

4. Each defendant denies that the plaintiff was entitled to an order under the Administration and Probate Act.  The second and third defendants specifically deny that the plaintiff suffered detriment and plead that the court in any proceedings would have determined that her father had no responsibility to provide for her. 

5. The factors to be considered in an application under the Administration and Probate Act include the financial resources (including earning capacity) and the financial needs of the plaintiff, at the time and for the foreseeable future, and the liability of any other person to maintain her.  The factual issues in the trial will include the financial position of the plaintiff and her husband around the time of her father's death.    

6. This is reflected in the way the parties have conducted their cases.  In her opening submissions for the trial, the plaintiff refers to her husband's employment and earnings, and to proceedings by the Australian Taxation Office against her husband.  In her witness statement, she also refers to her husband saying that she should obtain legal advice if she was unhappy with the situation concerning Mr Waterton's will, and telling her she may be entitled to make a claim against the estate [221] ‑ [222]; she speaks of family meetings at which her husband was present when the estate and gifts from her mother to the children were discussed (although some of these passages have been objected to and may not ultimately be in evidence).

7. I am also aware that documents have been included in the papers for the judge which relate to companies in which Mr Lafferty holds, or held, office.  The second defendant has filed a supplementary trial bundle, which includes a certificate of title for a property jointly owned by the plaintiff and Mr Lafferty, a mortgage with the Commonwealth Bank in relation to borrowing by Mr Lafferty, and a caveat registered by Avco Financial Services Ltd in relation to borrowing by Mr Lafferty.  I do not yet know the proposed use of these documents, but Mr Lafferty's financial position at various times simply cannot be disentangled from the issues that the court will have to decide. 

8. The plaintiff does not intend to call Mr Lafferty as a witness.  I do not know whether that decision will be the subject of any submissions by the defendants.

Restraining a practitioner - principles

1. The principles were summarised by Le Miere J in Frigger v Mervyn Jonathon Kitay in his capacity as Liquidator of Computer Accounting & Tax Pty Ltd (in liquidation) [No 10] [2016] WASC 63, and I respectfully adopt his statement:

   This court has power to restrain lawyers from acting for clients so as to ensure that the administration of justice is not brought into disrepute by the conduct of the practitioners. The justification for intervention by the court in applications of this kind has been put on a number of bases. The basis which is relevant in this application and is relied upon by the plaintiffs is the court's control over the conduct of solicitors as its officers. The court may restrain solicitors from acting for a client in proceedings when the court, acting under its inherent supervisory jurisdiction, considers that it is necessary to do so in order to ensure the due administration of justice. The court might exercise this control in the event of a lawyer proposing to act but having a personal interest, because for instance he or she is closely related to the client or has a financial or professional interest in the outcome of the proceedings or where he or she is likely to be called as a witness, such that he or she is unable to give the court the independent and uninvolved assistance which it expects [23].

2. The power to restrain a lawyer from acting is not lightly exercised.  In Dal Pont, Lawyers' Professional Responsibility (6th ed) [17.20], the author refers to cases where the exercise of the power has been described as extraordinary, to be applied sparingly and only in a clear case.  I believe that this case is both extraordinary and clear because of the combination of factors I have referred to:  Mr Lafferty's relationship to the plaintiff; the proscription in the Conduct Rules from acting as counsel if it would be difficult for him to maintain professional independence because of that relationship; the importance of his own financial affairs to the issues; and his direct participation in events which are part of the facts in issue, even if he is not to be called.

3. For these reasons I adjourned the trial and ordered that Mr Lafferty not act as counsel for the plaintiff.