Liu v Liu (No 2) - [2011] SASC 192

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Civil)
LIU v LIU & ANOR (NO 2)
[2011] SASC 192
Reasons for Decision of The Honourable Justice Stanley
4 November 2011
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - OTHER MATTERS ARISING BEFORE TRIAL
Second defendant's application seeking orders for an injunction restraining the solicitor for the plaintiff from doing or threatening to do various acts - second defendant claims the injunction is necessary to protect the second defendant from improper intimidation in the principal proceedings - whether the court has power to make the orders sought - whether the orders should be granted, assuming the court has power to do so.
Held: not appropriate to grant the application in the circumstances - not necessary to determine whether the court has power to make the orders sought - application dismissed.
Supreme Court Civil Rules 2006 (SA) r 3, r 116, r 117, referred to.
Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, discussed.
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd [1993] AC 227; Black v Taylor [1993] 3 NZLR 403; D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118; Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357; Grimwade v Meagher [1995] 1 VR 446, considered.

LIU v LIU & ANOR (NO 2)
[2011] SASC 192
Civil
STANLEY J:
Introduction

In this matter the second defendant has sought orders in the nature of an injunction restraining the solicitor for the plaintiff, in the course of, and in relation to, the principal proceedings, from doing or threatening to do the following:
(1)    making allegations to the effect that the second defendant has sworn false affidavits or statements, has committed perjury, has committed any criminal offence, has stolen documents or is handling stolen property, without leave of the court being first obtained;
(2)    threatening to lodge a complaint with SA Police against the second defendant, without leave of the court being first obtained;
(3)    alleging that any of the second defendant’s solicitors have sworn false affidavits in these proceedings, have misled or been untruthful to the court in these proceedings, or are handling stolen property in these proceedings, or have otherwise engaged in improper or unprofessional conduct, without leave of the court being first obtained;
(4)    threatening to report to the Legal Practitioners Conduct Board conduct of any of the second defendant’s solicitors, without leave of the court being first obtained; and
(5)    demanding that the second defendant or her solicitors deliver up any original documents, otherwise than in the usual course of litigation, without leave of the court being first obtained.
The application is unusual.
The principal action concerns a residential property in Rosslyn Park which was transferred by the plaintiff to the defendants in late 2007. The defendants were at the relevant time husband and wife. The first defendant is the plaintiff’s nephew.
The plaintiff alleges the transfer of the property occurred without valuable consideration pursuant to an agreement whereby the property was transferred for the purposes of facilitating an application for business migration visas by the defendants. The plaintiff alleges the defendants agreed to retransfer the property to the plaintiff once they had obtained visas.
In the proceedings as originally instituted, the plaintiff alleged that in breach of trust the second defendant failed or refused to execute a transfer to the plaintiff of her interests in the property upon request in the latter part of 2009.
The defendants have now separated. On 12 October 2009 the first defendant executed a memorandum of transfer in respect of the property.
Background
The second defendant brings this application against the following background.
The plaintiff commenced this action in 2009. An action for summary judgment was heard and dismissed in early 2010. On 27 June 2011 the solicitor for the plaintiff wrote to the solicitors for the second defendant setting out a basis upon which the plaintiff alleged the second defendant had committed perjury by reason of the contents of an affidavit sworn by her in these proceedings. The letter concluded:
Unless we hear from you to the contrary of your client’s reasonable explanation for such perjury within the next 14 days as from the day of this letter, failing which our client will take further actions without further notice.
On 5 September 2011 the plaintiff’s solicitor wrote to the second defendant’s solicitors that in the course of inspection, the plaintiff identified a number of documents discovered by the second defendant which were asserted to be the property of the plaintiff and which were asserted to have been kept by the plaintiff in a filing cabinet in her home. The solicitor said:
The second defendant’s production of the above documents is prima facie evidence that she has taken from the plaintiff the said documents without her permission, authority and consent whatsoever.
We refer to our letter to you of 5 September 2011. The plaintiff instructs us to demand full return of all the documents taken by the second defendant by 12 noon on Tuesday, 6 September 2011, failing which the plaintiff will lodge a complaint to the police for further investigation without further notice.
The reference to a letter of 5 September 2011 is to a further letter of the same date from the plaintiff’s solicitor to the second defendant’s solicitors identifying other documents discovered by the second defendant in the proceedings, which were asserted to be the property of the plaintiff or her sister, and which were alleged to have been kept in the same filing cabinet at the plaintiff’s residence. This letter also contained a threat that if the nominated documents were not returned by the second defendant to the plaintiff and her sister, the plaintiff would lodge a complaint to the police for further investigation without further notice.
On 15 September 2011 the plaintiff’s solicitor wrote to the second defendant’s solicitors referring to an affidavit of Leo Gerard Walsh, a solicitor acting for the second defendant, filed in the proceedings, which set out matters that Mr Walsh identified required further investigation by way of a tracing exercise, in consequence of the plaintiff’s application to amend the statement of claim to plead a breach of a resulting trust. Mr Walsh’s affidavit made reference to pursuing investigations inter alia into two companies, namely, New Excel Enterprise Ltd (NZ) and New Excel International Ltd.
In his letter of 15 September 2011 the plaintiff’s solicitor demanded, on behalf of his client, that Mr Walsh withdraw that part of his affidavit regarding the companies, failing which a report would be lodged with the Legal Practitioners Conduct Board without further notice. It appears the basis of this threat was that documents relating to those companies were allegedly stolen from the plaintiff and her family members.
On the same date the plaintiff’s solicitor wrote again to the second defendant’s solicitors indicating that he was acting for a Mr Yung Yu and again referring to the affidavit of Mr Walsh filed in the within proceedings on 15 September 2011. The letter again complained of that part of Mr Walsh’s affidavit which set out investigations he considered the second defendant needed to undertake in light of the amendment to the statement of claim pleading a breach of a resulting trust. This letter was in similar terms to the letter from the plaintiff’s solicitor of the same date. It again contained a threat to refer Mr Walsh to the conduct board without further notice unless he withdrew that part of his affidavit referring to documents which would be sought by way of third party disclosure from Yung Yu.
On 20 September 2011 the plaintiff’s solicitor wrote to the second defendant’s solicitors asserting that his client had instructed him that certain matters deposed to by Mr Walsh in his affidavit of 15 September 2011 contained information obtained from documents stolen from the plaintiff and her family members, that the use of such documents may involve the commission, presumably by Mr Walsh, of the offence of handling stolen property and included an allegation that certain assertions by Mr Walsh in his affidavit were false, misleading and untrue. The letter again complained of that paragraph of Mr Walsh’s affidavit of 15 September 2011 which set out the further investigations he considered were necessary by reason of the amendment to the statement of claim to plead the resulting trust claim.
Against this background, the second defendant’s solicitors wrote to the plaintiff’s solicitors complaining that the threats set out above were designed to intimidate the second defendant from mounting a defence to the plaintiff’s action. Specifically this complaint was advanced in a letter from the second defendant’s solicitors to the plaintiff’s solicitor on 6 September 2011.
The orders sought by the second defendant against the plaintiff’s solicitor are sought on the basis that it is necessary to protect the second defendant from improper intimidation in the principal proceedings.
The power to make the orders sought is said by the second defendant to derive from a combination of the court’s inherent powers to regulate its own processes, to prevent an abuse of its processes and to supervise practitioners, as well as in reliance upon 6SCR 3, 116 and 117.
The orders have been sought in the principal proceedings.
The second defendant submitted that she is a vulnerable person, being a single mother with limited English language skills and a lack of familiarity with Australian legal process. As such, it is asserted that her decision-making could be influenced adversely in the conduct of the principal proceedings without the plaintiff’s solicitor being restrained in the manner sought.
The plaintiff’s solicitor opposed the application.
He challenged the power of the court to make the orders sought and, in addition, he submitted no proper foundation existed to exercise such power in the present circumstances, if it does exist.
In my view, this matter can be disposed of shortly.
The Court’s powers to grant the relief sought
This application raises an interesting question as to the court’s power.
An injunction is a discretionary remedy.[1]
[1] Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 396; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at 68 [19]; Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd [1993] AC 227 per Lord Goff at 271.
While there can be no doubt that the court has an inherent jurisdiction to control those who might be permitted to represent parties in proceedings in the court based on general considerations of the administration of justice,[2] I can find no authority, and no authorities have been cited by counsel, to support the proposition that the court’s inherent jurisdiction extends to restraining a solicitor, acting on instructions, from referring matters to the police or regulatory authorities or from threatening to do so, where the purpose of such conduct is designed to be, or has the effect of, intimidating a party to proceedings in the court. Likewise, counsel acknowledged the absence of any authority where a court has done so in reliance upon its rules.
[2] Black v Taylor [1993] 3 NZLR 403; D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118; Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357; Grimwade v Meagher [1995] 1 VR 446 at 452.
Nonetheless, in Spincode Pty Ltd v Look Software Pty Ltd,[3] Brooking JA[4], in a different context, said that the nature and objectives of the jurisdiction which the court exercises over its officers and the breadth of the discretion conferred upon the court, enabled the court to restrain solicitors from acting in a matter, irrespective of whether or not to do so would infringe any legal or equitable right of the solicitors to act, in circumstances where the conduct of the solicitors was so offensive to common notions of fairness and justice that they should, as officers of the court, be brought to heel.[5] This approach suggests, at least, that the court’s inherent jurisdiction permits it to craft remedies necessary to prevent interference by any person, including its own officers, in the proper administration of justice.
[3] (2001) 4 VR 501.
[4] With whom Ormiston and Chernov JA agreed.
[5] (2001) 4 VR 501 at 524-525.
In Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia[6] the High Court said the general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders as are needed to ensure the effective exercise of the jurisdiction invoked. This includes orders to prevent the frustration of its process. However, such orders are limited in that they may only be made against the parties to the proceedings against whom final relief might be granted.
[6] (1998) 195 CLR 1 at 32.
But this is not the only obstacle confronting the success of the second defendant’s application.
At least since the High Court’s judgment in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd[7] it has been accepted that a court will not grant an interlocutory injunction where the subject matter of the injunction sought does not concern any legal or equitable rights which are to be determined at the trial and in respect of which final relief is sought.
[7] (2001) 208 CLR 199.
In this matter the injunction which is sought is not against a party to the principal proceedings. The basis of the interlocutory injunction sought does not concern a legal or equitable right in issue in the principal proceedings in respect of which final relief is sought. Nonetheless, a real question arises as to the court’s power to regulate the conduct of practitioners so as to prevent a threat to the proper administration of justice. However, I do not need to answer this question.
In this case, even if I was persuaded that I was cloaked with power to grant the application sought, I would decline to do so in the exercise of my discretion.
In this matter, by letter dated 30 September 2011, the solicitor for the plaintiff wrote to the solicitors for the second defendant, expressly indicating that the letters dated 5 September 2011 were not intended to intimidate the second defendant. Additionally, he wrote:
Nevertheless, our view is that these matters can be ventilated at the conclusion of the trial. We do not propose to advance these matters any further, nor will we act for our client or her sister or provide them with any advice in relation to the referral of the dispute to police. We confirm that our retainer is strictly limited to the prosecution of our client’s claim as pleaded in the second statement of claim filed on 23 September 2011.
Furthermore, in the course of the argument in this matter, counsel for the plaintiff’s solicitor informed the court, that the court could proceed on the basis that the reference in the passage from the letter, to which I have just referred, to “these matters”, is to encompass the plaintiff’s solicitor’s letters to the second defendant’s solicitors of 15 September 2011.
While the terms of the correspondence from the plaintiff’s solicitor was, to say the least, unfortunately expressed, I am content to dispose of this matter on the basis that the plaintiff’s solicitor, as an officer of the court, has given a commitment that, until the conclusion of the principal proceedings, he will not do anything further in relation to the various threats ventilated, as I accept, on instructions, in respect of the second defendant.
While this commitment is not an undertaking to the court, I am mindful of the fact the commitment is proffered from one solicitor to another. I am satisfied that I can proceed in reliance upon the provision of such a commitment by an officer of the court.
In these circumstances, there can not be any suggestion that the second defendant should feel inhibited in any way in defending the principal proceedings. If circumstances should change, it is open to the second defendant to make further application to the court.
Conclusion
In the circumstances I do not consider it appropriate to grant the application, assuming I am empowered to do so. For the above reasons it is unnecessary to decide that point.
For these reasons I dismiss the application.