Lyons v Legalese Pty Ltd & Ors - [2016] SASC 160

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Application)
LYONS v LEGALESE PTY LTD & OTHERS
[2016] SASC 160
Judgment of The Honourable Justice Hinton
5 October 2016
PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - INHERENT AND GENERAL STATUTORY POWERS - GENERALLY
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PARTIES AND REPRESENTATION - LEGAL REPRESENTATION - GENERALLY
LIMITATION OF ACTIONS - EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS - GENERALLY - POWER OF COURT TO EXTEND LIMITATION PERIOD
Application for an order restraining the first and third defendants from acting in an inferior court.
The second defendant instituted proceedings in the civil jurisdiction of the Magistrates Court seeking damages for personal injuries she sustained in a motor vehicle accident that occurred as a consequence of the plaintiff’s negligence.
The Magistrates Court proceedings were instituted eight days out of time. The second defendant applied for an extension of time in which to institute the proceedings, based in part on the conceded negligence of her solicitors.
The plaintiff sought an order from this Court restraining the first and third defendants from further acting as the solicitors for the second defendant in the Magistrates Court proceedings.
Held, granting the application:
1. The conduct of Peter Scragg & Associates is so integrally identified with the issues subject of the application of an extension of time that it is appropriate to exercise the discretion to restrain the defendants from acting for the second defendant.
2. The first and third defendants are restrained from acting for the second defendant in the Magistrates Court proceedings.
Limitation of Actions Act 1936 (SA) s 36, 48; Motor Vehicles Act 1959 (SA) s 125; Magistrates Court Act 1991 (SA) ss 8(1), (2); Supreme Court Act 1935 (SA) s 17(2); Supreme Court Civil Rules 2006 (SA) r 168(2), referred to.
Ulowski v Miller [1968] SASR 277 at 282; John Fairfax & Sons Pty Ltd v McCrae (1955) 93 CLR 351; Kirk v The Industrial Court of New South Wales (2010) 239 CLR 531; Rex v Barker (1762) 3 Burr 1265; Kallinicos and Another v Hunt and Ors (2005) 64 NSWLR 561; H Stanke & Sons v Von Stanke (2006) 95 SASR 425; Re Westgate Wool Co Pty Ltd (2006) 206 FLR 190; Taylor v Attorney-General [1975] 2 NZLR 67; NH v The Director of Public Prosecutions (SA) [2016] HCA 33; Abse v Smith [1986] QB 536; Everingham v Ontario (1992) 88 DLR (4th) 755; Afkos Industries Pty Ltd v Pullinger Stewart (A Firm) ; R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256; Coppola & Anor v Nobile & Anor (2012) 279 LSJS 543; Belan v Casey [2002] NSWSC 58; Newman v Phillips Fox (1999) 21 WAR 309; Bowen v Stott [2004] WASC 94; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307; Murray v Macquarie Bank Ltd (1991) 33 FCR 46; Kooky Garments Ltd v Charlton (1993) 1 NZLR 587; Holborow & Ors v MacDonald Rudder [2002] WASC 265; Martin v Gray (1990) 77 DLR (4th) 249; Smith v Roach (2006) 227 CLR 423; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; Viscariello v Legal Profession Conduct Commissioner [2015] SASC 4; Webb v R (1994) 181 CLR 41; Concrete v Parramatta Design (2006) 229 CLR 577; Hearne v Street (2008) 235 CLR 125; Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12; Harman v Secretary of State for Home Department [1983] 1 AC 280; Mitchell v Burell [2008] NSWSC 772; Commissioner for Corporate Affairs v Harvey [1980] VR 669; Re O’Neil (deceased) [1972] VR 327; In the Estate of Constantine (deceased) [1947] SASR 415; Freeman v Chicago Musical Instrument Co 689 F2d 715 (1982), considered.

LYONS v LEGALESE PTY LTD & OTHERS
[2016] SASC 160
HINTON J.
Introduction

Kathy Morris (nee Butcher) is the second defendant in this matter. She instituted proceedings in the civil jurisdiction of the Magistrates Court of South Australia on 9 September 2014. In those proceedings, she seeks damages for personal injuries she says she sustained in a motor vehicle accident that occurred on 1 September 2011 as a consequence of the negligence of the plaintiff in this matter, Alia Lyons.
The Magistrates Court proceedings were instituted eight days out of time.[1]
[1] Limitation of Actions Act 1936 (SA) s 36.
The trial of Ms Morris’ claim commenced in the Magistrates Court on 9 May 2016. Liability is conceded by Ms Lyons’ insurer, who conducts the Magistrate Court proceedings and these proceedings on her behalf as permitted by the Motor Vehicles Act 1959 (SA).[2] However, in the trial Ms Lyons has opposed the application for an extension of time in which to institute the proceedings that Ms Morris has necessarily had to make under the Limitations of Actions Act 1936 (SA).[3]
[2] Motor Vehicles Act 1959 (SA) s 125. Consequently, wherever this judgment refers to the actions of Ms Lyons or Ms Lyons’ solicitors in relation to either this matter or the Magistrates Court proceedings, it should be understood as referring to the actions of the insurer, its claims manager, and their solicitors unless the context otherwise indicates.
[3] Limitation of Actions Act 1936 (SA) s 48.
Ms Morris’ application for an extension of time is based in part on the conceded negligence of her solicitors, Peter Scragg & Associates. Peter Scragg & Associates is the trading name for the partnership, P A Scragg and R V Scragg (ABN 45 756 702 125). That partnership has been in existence since 30 September 2012. Prior to that date, Peter Scragg & Associates was the trading name of Legalese Pty Ltd (ACN 008 170 205; ABN 99 008 170 205). In these reasons I refer to the first and third defendants, that is, the partnership and Legalese Pty Ltd, collectively as the defendants.
Mr Peter Scragg is the principal of Peter Scragg & Associates. He gave evidence in this Court accepting that Ms Morris’ claim was instituted out of time because of the negligence of his firm.
In the trial in the Magistrates Court, at the conclusion of the opening of Ms Morris’ case, counsel for Ms Lyons sought an order from the presiding Magistrate that the defendants be restrained from further acting as the solicitors for Ms Morris. The Magistrate declined to make that order in the belief that she had no power to do so. She adjourned the trial, however, in order that Ms Lyons could approach this Court for the relief she sought.
By summons dated 21 June 2016, Ms Lyons seeks an order from this Court restraining the first and third defendants from continuing to act for Ms Morris in the Magistrates Court proceedings. In short, she contends that at least one, and possibly more, solicitors working for the third defendant will be material witnesses in the trial on the issue of whether an extension of time should be granted. Further, the concession that Peter Scragg & Associates was negligent has the consequence that the partnership has an interest in the outcome of the trial which, it is said, does not necessarily align with Ms Morris’ interests. Lastly, it is contended that in the conduct of the proceedings to date the partnership has already acted in a manner furthering its own interests at the expense of those of Ms Morris.
Ms Lyons accepts that the proceedings were instituted at a time when the partnership was in existence, however when Ms Morris first instructed Peter Scragg & Associates in relation to the injuries she sustained in 2011, she was represented by Legalese Pty Ltd trading as Peter Scragg & Associates. Ms Lyons contends that there is nothing to prevent Legalese Pty Ltd resuming acting for Ms Morris, hence she seeks an order restraining both the corporate defendant and the partnership. The defendants do not take issue with this approach.
Ms Morris has indicated that Peter Scragg & Associates has advised her of its negligence. Nonetheless she wishes for the partnership to continue to act for her. Beyond advising this Court of her desire, she declined to take further part in this matter as a party, being content to abide by the order of the Court.
For their part the defendants deny that they have acted in pursuit of their own interests to the detriment of Ms Morris. The partnership points to the concession that it was negligent as having the consequence that there can be no contest as to whether the Peter Scragg & Associates’ actions were causative of the failure to institute proceedings in time. In addition, the partnership points to the fact that independent counsel has been retained to act for Ms Morris and that Ms Morris and this Court can take comfort from the fact of the independence of counsel, and counsel’s duties to the client, that the defendants’ interests, such as they are, will be excised from any decision making in the conduct of the Magistrates Court proceedings.
I would make the order sought. My reasons follow.
The Limitation of Actions Act 1936 (SA)
It is necessary to set out the history of the proceedings in the Magistrates Court. However, before doing so, it assists to consider the operation of s 48 of the Limitation of Actions Act 1936 (SA) and the grounds upon which an extension of time may be sought.
Section 48 provides:
(1) Subject to this section, where an Act, regulation, rule or by-law prescribes or limits the time for—
(a)     instituting an action; or
(b)     doing any act, or taking any step in an action; or
(c)     doing any act or taking any step with a view to instituting an action,
a court may extend the time so prescribed or limited to such an extent, and upon such terms (if any) as the justice of the case may require.
(2) A court may exercise the powers conferred by this section in respect of any action that—
(a)     the court has jurisdiction to entertain; or
(b)     the court would, if the action were not out of time, have jurisdiction to entertain.
(3)     This section does not—
(a)     apply to criminal proceedings; or
(b)     empower a court to extend a limitation of time prescribed by this Act unless it is satisfied—
(i) that facts material to the plaintiff's case were not ascertained by him until some point of time occurring within twelve months before the expiration of the period of limitation or occurring after the expiration of that period and that the action was instituted within twelve months after the ascertainment of those facts by the plaintiff; or
(ii) that the plaintiff's failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances, and that in all the circumstances of the case it is just to grant the extension of time.
(3a) A fact is not to be regarded as material to the plaintiff's case for the purposes of subsection (3)(b)(i) unless—
(a)     it forms an essential element of the plaintiff's cause of action; or
(b)     it would have major significance on an assessment of the plaintiff's loss.
Example—
In a case involving personal injury, a fact might qualify as a fact material to the plaintiff's case if it establishes—
(a)     a substantial reduction of the plaintiff's capacity to work; or
(b)     that the plaintiff will require substantially more medical care than previously expected; or
(c)     a significant loss of expectation of life.
(3b) In determining whether it is, in all the circumstances of a case, just to grant an extension of time, the court should have regard to—
(a)     the period of extension sought and, in particular, whether the passage of time has prejudiced a fair trial; and
(b)     the desirability of bringing litigation to an end within a reasonable period and thus promoting a more certain basis for the calculation of insurance premiums; and
(c)     the nature and extent of the plaintiff's loss and the conduct of the parties generally; and
(d)     any other relevant factor.
Section 48(4), (5) and (6) are not presently relevant.
In this matter, s 36 of the Limitation of Actions Act 1936 (SA) provides the limitation upon which s 48(1) of that Act operates. Ms Morris’ claim, as originally instituted, was for damages in the amount of $100,000. Consequently, her personal injury action fell within the civil jurisdiction of the Magistrates Court.[4] That, in turn, has the consequence that s 48(2) of the Limitation of Actions Act 1936 (SA) operates to vest power in the Magistrates Court to hear an application for an extension of time in those proceedings.
[4] Magistrates Court Act 1991 (SA) s 8(1)(a). The parties subsequently waived the monetary limit on the civil jurisdiction of the Court as permitted by s 8(2) of the Magistrates Court Act1991 (SA) with the consequence that the Court had jurisdiction to determine the action despite Ms Morris subsequently amending her claim to seek damages in the amount of $500,000.
The enlivenment of the power to extend time granted by s 48(1) is conditioned upon the relevant court being satisfied of either of the circumstances subject of s 48(3)(b)(i) or (ii). This being so, s 48(3)(b)(i) or (ii) are in the nature of jurisdictional facts. Satisfaction of either jurisdictional fact enlivens the power to extend time, that power to be exercised having regard to s 48(3b).
As indicated in the introduction to this judgment, Ms Morris’ application for an extension of time is based in part on the conceded negligence of her solicitors. Having regard to the brief analysis of s 48 above it is clear that solicitor error in and of itself is not a reason justifying a court in granting an extension of time under the Limitation of Actions Act 1936 (SA). However, if either of the jurisdictional facts in s 48(3)(b)(i) or (ii) are established, solicitor error is relevant to the exercise of the discretion then enlivened. In this connection, in Ulowski v Miller, Bray CJ said:[5]
I agree that there may be a distinction between delay for which the plaintiff is personally responsible and delay for which his solicitors alone are responsible. The former will operate more severely against him than the latter when the question of hardship is being considered. See Allen v Sir Alfred McAlpine & Sons Ltd.
[Citation omitted.]
[5] Ulowski v Miller [1968] SASR 277 at 282.
The Magistrates Court proceedings
On 9 September 2014, Peter Scragg & Associates filed a Personal Injury Motor Vehicle claim in the civil division of the Magistrates Court of South Australia on behalf of Ms Morris. The particulars of that claim included:
1.   On 1 September 2011 the plaintiff was the front seat passenger in a motor vehicle which was facing in a northerly direction and stationary on Bolivar Road Paralowie waiting to merge with oncoming traffic.
2.   At the same time and place the defendant so negligently drove, managed and controlled her vehicle that he [sic] caused it or permitted it to violently collide with [sic] into the rear of the vehicle in which the plaintiff was travelling.
…
3.   In consequence of the collision, the plaintiff sustained severe injuries and has suffered loss and damage.
The claim goes on to particularise the various injuries that Ms Morris has allegedly suffered and the consequences of those injuries. As mentioned, pursuant to s 36 of the Limitation of Actions Act 1936 (SA), the claim should have been instituted by 1 September 2014.
Ms Morris does not dispute that her claim was eight days out of time. In fact, in her claim she made plain she sought an extension of time. However, having regard to s 48 of the Limitations of Actions Act 1936 (SA), the claim as drafted left Ms Lyons none the wiser as to the basis upon which the extension of time was sought.
On 25 June 2015, in purported compliance with an order made in the Magistrates Court on 3 June 2015 that Ms Morris provide further and better particulars of her application for an extension of time, Peter Scragg & Associates filed an Amended Claim on behalf of Ms Morris. In the Amended Claim, Ms Morris asserted that she did not ascertain a fact or facts material to her case, being facts related to the injury she suffered as a result of the accident, until 24 September 2013. On this basis, the claim revealed that Ms Morris sought to bring herself within s 48(3)(b)(i) and s 48(3a) of the Limitations of Actions Act 1936 (SA).
On 8 July 2015, Ms Lyons filed a defence to the action. In that defence, Ms Lyons admitted liability in respect of the motor vehicle accident in that she admitted to the acts of negligence. However, she denied that Ms Morris had suffered any injury, loss or damage as a result of the collision.
On 24 September 2015, Peter Scragg & Associates filed an interlocutory application on behalf of Ms Morris seeking preliminary determination of her application for an extension of time pursuant to s 48(5) of the Limitations of Actions Act 1936 (SA). That application was called on for hearing on 4 December 2015. At that time Mr Scragg, who appeared as counsel for Ms Morris, advised the Court that Ms Morris no longer pursued the application and instead sought an urgent trial listing for the determination of all issues. That request was acceded to and the matter was listed for a four day trial commencing 9 May 2016.
On 17 February 2016, Peter Scragg & Associates filed a Second Amended Claim on behalf of Ms Morris. The Second Amended Claim pleaded a large amount of correspondence between Peter Scragg & Associates and Allianz as Claims Managers for the Motor Accident Commission, Ms Lyons’ insurer. That section of the Second Amended Claim concerned with the application for an extension of time concluded with the following:
7.8in the premises the plaintiff’s failure to institute the action within the period of limitation resulted from the conduct of Allianz, an entity that the plaintiff reasonably believed was acting on behalf of the defendant, and was reasonable in view of that conduct.
The plaintiff did not specifically pleaded reliance on s 48(3)(b)(ii) of the Limitation of Actions Act 1936 (SA), despite paragraph 7.8 obviously being relevant thereto, rather she has pleaded that an extension of time be granted pursuant to s 48(3a).
The matter was called on for mention on 2 March 2016. Prior to that date, the parties had agreed in correspondence to waive the upper monetary limit on the jurisdiction of the Magistrates Court.[6] In the circumstances the Magistrate ordered Ms Morris to file an amended claim specifying the fresh amount claimed by her in damages.
[6] Magistrates Court Act 1991 (SA) s 8(2).
On 3 March 2016, Peter Scragg & Associates filed a Third Amended Claim on behalf of Ms Morris amending the amount claimed in damages. The Third Amended Claim retained clause 7.8 in the same terms as the Second Amended Claim.
On 8 March 2016, the solicitors for Ms Lyons filed an Amended Defence. By that Defence, Ms Lyons denied Ms Morris’ claim that her failure to institute the action within time resulted from the conduct of Ms Lyons’ insurer and denied her claim that the facts that she ascertained within 12 months prior to the issue of proceedings were material within the meaning of s 48(3a) of the Limitations of Actions Act 1936 (SA).
On 2 May 2016, the solicitors for Ms Lyons wrote to Peter Scragg & Associates referring to clause 7.8 and asserting that the Third Amended Claim did not particularise the specific conduct of Allianz which was alleged to have caused Ms Morris to institute the proceedings out of time. The letter acknowledged the references made in the claim to correspondence that had passed between Allianz and Peter Scragg & Associates, but complained that it was not clear whether the correspondence was relied upon in support of the assertion made at 7.8 and, if it was, what were the particular representations contained in that correspondence that were relied upon. The letter proceeded to advise Peter Scragg & Associates that for the purposes of making out the plea in paragraph 7.8, assuming what was pleaded was reliance on conduct moving from Allianz, either Ms Morris would need to give evidence of representations or conduct that directly caused her to institute her claim out of time, or, her solicitors would need to give evidence of representations or conduct that they relied upon and which directly caused them to institute her claim out of time. The letter went on to say that, if it was Ms Morris’s case that the relevant reliance was by Peter Scragg & Associates, then Peter Scragg & Associates would need to produce their file and cease to act for Ms Morris as the solicitors would likely be material witnesses in the case. The letter foreshadowed an application to restrain Peter Scragg & Associates from acting in the event that Ms Morris based her application for an extension of time upon her solicitors being misled by representations or conduct moving from Allianz that caused her claim to be instituted out of time.

The letter of 2 May 2016 then turned to the issue of solicitor error. It noted that the Third Amended Claim did not plead a failure to institute proceedings within time due to solicitor error. It advised that Ms Lyons would be proceeding on the basis that solicitor error formed no part of Ms Morris’ case and further, would object to such evidence if it were lead at trial on the basis that the issue had not been specifically pleaded. Further, Ms Lyons’ solicitors also foreshadowed objection being taken to any application to amend the claim to assert solicitor error.
Peter Scragg & Associates replied to Ms Lyons’ solicitors’ letter of 2 May 2016 by letter dated 4 May 2016. In that letter, Peter Scragg & Associates made plain that Ms Morris’ application for an extension of time was based on three grounds; first, that she had learned of facts material to her case within 12 months of the expiration of the limitation period and that her claim was instituted within 12 months of learning of those facts. In this regard, she intended to bring her application within s 48(3)(b)(i) of the Limitations of Actions Act 1936 (SA). Second, the letter asserted that Ms Morris did intend to rely upon representations and conduct moving from Allianz as provided for by s 48(3)(b)(ii), but provided no further particulars of the relevant representations or conduct. Third, Ms Morris would contend that Ms Lyons had waived her right to rely on the limitation point by virtue of conduct inconsistent with the maintenance of such right. In this regard, the letter said:
Between early September 2014 and 10 March 2015 your client was aware that our client, and her legal advisers relied on those matters, and were doing work and incurring expenses in order to obtain proof of her losses.
The letter then referred to the issue of solicitor error. It stated:
As to whether solicitor error is alleged, our client will say that it is a relevant circumstance for the Court to take into account that the failure to institute proceedings in time was an act for which her solicitors, as opposed to her, are responsible. It is a solicitor’s responsibility to ensure that proceedings are filed within time. That is stating the obvious. We do not agree that requires any amendment to the pleadings or adjournment of the trial.
Ms Lyons claims that it was not until she received the Peter Scragg & Associates letter of 4 May 2016 that she had notice that Ms Morris intended to rely on solicitor error in support of her application for an extension of time.
It is to be recalled that the trial, including the application for an extension of time, was listed to commence on 9 May 2016.
Ms Lyons’ solicitors replied to Peter Scragg & Associates by letter of the same date, 4 May 2016. That letter stated that the claim of solicitor error should be pleaded and the firm’s file in respect of Ms Morris’ claim produced in order for the contention to be properly tested. Ms Lyons’ solicitors also reiterated that, in their view, Peter Scragg & Associates should cease to act for Ms Morris. The solicitors repeated that they would seek to restrain Peter Scragg & Associates from acting should Peter Scragg & Associates continue to do so.
At the commencement of the trial of the matter on 9 May 2016, counsel for Ms Lyons foreshadowed an application that Peter Scragg & Associates be restrained from further acting for Ms Morris. The Magistrate indicated that she wished to hear the opening of Ms Morris’ case prior to considering any such application. Counsel for Ms Morris then opened. The transcript of the opening is not before this Court. Rather the plaintiff has tendered, without objection, an affidavit from Ms Fiona Brady, the solicitor with conduct of the matter on behalf of Ms Lyons, who was present during the opening. Ms Brady reports:[7]
35. Mr Lazaverich then proceeded to open Ms Butcher’s case. Mr Lazaverich opened Ms Butcher’s case on the following basis:
a) In relation to her application for an extension of time pursuant to s 48 of the Act, Ms Butcher relies on the deterioration in her condition, need for urgent surgery and subsequent recovery in September 2013 as the material facts relied on for the purposes of s 48(3)(b)(i) of the Act.
b) For the purposes s 48(3a)(b) of the Act, Ms Butcher would ask the Court to accept that the ascertainment of those material facts had “major significance” on an assessment of her loss. In particular, Ms Butcher would contend that the quantum of her damages, following ascertainment of the material facts, was significantly reduced, which it was asserted would satisfy the test of “major significance on an assessment” of her loss contained in s 48(3a)(b) of the Act.
c)   Mr Lazarevich asserted, on behalf of Ms Butcher, that, it was Ms Butcher’s case that Allianz had waived Ms Lyons’ entitlement to oppose Ms Butcher’s application for an extension of time, and that this waiver was in the nature of an estoppel, although Mr Lazarevich did not particularise what form of estoppel Ms Butcher asserted. Mr Lazarevich asserted, on behalf of Ms Butcher that, from the time that Ms Butcher’s claim was first notified to Allianz, there were requests for documents and negotiations which was conduct that continued even after Allianz ascertained that the matter was statute-barred.
d)   Mr Lazarevich advised the Court that Ms Butcher would call the plaintiff, the plaintiff’s daughter, medical experts and Ms Rosita Scragg. Ms Scragg is a solicitor employed by Peter Scragg & Associates. Ms Scragg would be called to give evidence in support of Ms Butcher’s case that solicitor error resulted in the Magistrates Court Action being issued out of time.
e)   Mr Lazarevich submitted that Ms Butcher was not required to have pleaded that solicitor error caused the Magistrates Court Action to be brought out of time.
[7]     On the hearing of this matter, Mr Scragg gave evidence. He said that he was not present for counsel’s opening and so could not dispute what Ms Brady deposed to have been said in her affidavit. I note that the Magistrate’s description of the opening of Ms Morris’ case, as contained in her reasons, is consistent with Ms Brady’s affidavit.
At the conclusion of the opening, counsel for Ms Lyons applied for an order restraining Peter Scragg & Associates from continuing to act in the proceedings. Counsel for Ms Morris opposed the application, submitting, amongst other things, that the Magistrate did not have jurisdiction to make the order sought.
The Magistrate delivered her judgment on the application the following day, 10 May 2016. After a consideration of the powers contained in the Magistrates Court Act 1991 (SA) and the authorities regarding the implied jurisdiction of the Magistrates Court, the Magistrate concluded:
Having carefully considered the respective submissions and the authorities relied upon by the parties on the question of jurisdiction I am not satisfied that this court does have jurisdiction to grant the first order as sought in the defendant’s oral application.
However, the Magistrate proceeded to grant the alternative order applied for by counsel for Ms Lyons. The Magistrate held:
The defendant has an alternative position, namely counsel for the defendant submitted that if I was not so satisfied with respect to jurisdiction the defendant seeks an adjournment of the proceedings to enable it to make the appropriate application in the Supreme Court.
Such order was opposed by the plaintiff on a number of bases, one of which was the issue of delay. Counsel for the plaintiff submitted that it must have been known to the defendant by February 2016 at the very latest that the question of solicitor error was a relevant issue as by that time Allianz was in communication with Law Claims. However, as previously stated, the Third Amended Claim does not plead solicitor error as a potential cause of the failure to institute the action in time as a relevant consideration in the exercise of this court’s discretion. It was not until the defendant’s solicitors received the letter from Peter Scragg and Associates dated 4 May 2016 (being Wednesday of last week) that the plaintiff’s solicitors advised the defendant through its solicitors that this was a matter intended to be relied on by the plaintiff at trial.
Counsel for the plaintiff referred to the decision in Bufalo being a case where a court would have granted an injunction as sought but for the delay in the application for the same being made. However I note that in that matter the action was commenced in 1999 and a trial date fixed in November 2009 to commence in October 2010. The relevant application in that case was made on the first day of trial.
In the within matter the plaintiff did not plead an entitlement to an extension of time until it filed its Amended Claim on 25 June 2015. There were then extensive amendments made to that pleading expressly dealing with the extension of time point (being the Third Amended Claim) but making no mention of solicitor error.
As such while any delay is regrettable, the reason for the same does not rest solely with the defendant. While any adjournment of the trial at this late stage is regrettable in my view it is appropriate for me to grant the adjournment as sought by the defendant. In making that order I have carefully considered the respective arguments as to merit of the application, beyond the issue of jurisdiction, and in my view the application has merit and it is appropriate for the Supreme Court to hear and determine the application.
The Magistrate also made orders that:
The plaintiff is to disclose and produce within 21 days all documents that appear in the file maintained by Legalese Pty Ltd t/as Peter Scragg & Associates in connection with this proceeding which relate to the filing of this proceeding save and except for any communications between Peter Scragg & Associates and Law Claims and/or Law Claims solicitors.
Leave to the plaintiff if so advised to file and serve a fourth amended claim to specifically plead solicitor error within 14 days.
Trial dates of 5 July and 6 July vacated. Relisted for 5 day trial commencing Monday 24 October at 10.00 am continuing Tuesday 25 October, Wednesday 26 October and Thursday 27 October at 10 am and Friday 28 October at 2.15pm.
On 12 May 2016, Peter Scragg & Associates wrote to the solicitors for Ms Lyons stating that they would oppose any application to restrain them from acting. The letter proposed that Peter Scragg & Associates could establish a ‘Chinese wall’ between Mrs Rosita Scragg and the remainder of the firm.
By letter dated 13 May 2016, the solicitors for Ms Lyons replied to Peter Scragg & Associates’ letter rejecting the ‘Chinese Wall’ proposal. On 23 May 2016, the solicitors for Ms Lyons wrote again to Peter Scragg & Associates foreshadowing an application to this Court to restrain Peter Scragg & Associates from acting in the Magistrates Court proceedings should they not cease to act immediately. The plaintiff filed a summons and interlocutory application seeking the same on 24 May 2016.
On 25 May 2016, Peter Scragg & Associates filed a Fourth Amended Claim on behalf of Ms Morris in the Magistrates Court. In the Fourth Amended Claim the allegation that Ms Morris’ failure to institute proceedings in time resulted from conduct on the part of Allianz is deleted. That said, the claim continues to plead an exchange of correspondence between Allianz, Ms Lyons’ solicitors and Peter Scragg & Associates that is said to demonstrate that no prejudice would be caused to Ms Lyons if an extension of time were granted. Further, solicitor error is then pleaded in the following terms:
The failure to institute proceedings in the [sic] time was not the plaintiff’s personal fault. She left the running of the case to her solicitor, and her solicitor failed to institute these proceedings within time.
Thus, Ms Morris’ intention is to seek an extension of time on the basis that she can bring herself within s 48(3)(b)(i). Doing so, as mentioned above, would then enliven the discretion to extend time vested in the court. That discretion, Ms Morris then contends, should be exercised in her favour having regard to, amongst other things, the fact that proceedings were instituted out of time through no fault of her own, that to extend time will not prejudice Ms Lyons, that not to do so will prejudice Ms Morris, and that the insurer, through its claims manager, has long been aware of the claim and long been in correspondence and negotiations with Ms Morris’ solicitors about the claim, such correspondence and negotiations continuing after 10 September 2014.
The Supreme Court’s supervisory jurisdiction
In instituting proceedings in this Court seeking an order restraining the defendants from acting in an inferior court, Ms Lyons engages this Court’s supervisory jurisdiction. That jurisdiction is vested in this Court by s 17(2)(a)(ii) of the Supreme Court Act 1935 (SA) in that the like jurisdiction, as was formerly vested in, or capable of being exercised by, the Court of Queen’s Bench is vested in this Court in and for this State. The jurisdiction of the Court of Queen’s Bench included a general supervisory function of “seeing that justice was administered and not impeded in lower tribunals”.[8] Thus the like jurisdiction in and for this State is conferred on this Court. The jurisdiction may be exercised in a manner corrective and protective using the prerogative writs, orders in the nature of the prerogative writs, and the power to punish for contempt of inferior courts.[9]
[8] John Fairfax & Sons Pty Ltd v McCrae (1955) 93 CLR 351 at 363-365 (Dixon CJ, Fullagar, Kitto and Taylor JJ). See also, Sir William Holdsworth, A History of English Law, Vol X pp 246-253; Vol XIV pp 198-204.
[9] John Fairfax & Sons Pty Ltd v McCrae (1955) 93 CLR 351 at 363 (Dixon CJ, Fullagar, Kitto and Taylor JJ); Kirk v The Industrial Court of New SouthWales (2010) 239 CLR 531 at [98]-[99] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ). In Rex v Barker (1762) 3 Burr 1265; 97 ER 823 Lord Mansfield CJ referred to mandamus having been granted to restore an attorney to practice in an inferior court. A fortiori an injunction could achieve the opposite.
An additional source of jurisdiction to entertain this matter springs from this Court’s power to superintend its officers.[10] In this regard, in H Stanke and Sons Pty Ltd v Von Stanke, White J said:[11]
The availability of a power to exercise authority over solicitors as officers of the court as to the propriety of their actions is well established. The existence and exercise of the power have been discussed in a number of authorities including Davies v Clough; Newman (Trustee of Estate of Littlejohn) v Phillips Fox (a firm); Frankland River Olive Co Ltd v Charters Securities Pty Ltd; Director of Public Prosecutions (WA) v Bennett & Co; Rouse v IOOF Australia (No 2); Kallinicos v Hunt (in which a number of authorities were reviewed); and Spincode Pty Ltd v Look Software Pty Ltd. The power exists to protect the integrity of the judicial process and to ensure that the administration of justice is not brought into disrepute by the conduct of members of the legal profession. In some cases, the occasion for an exercise of the power has been determined by applying an objective test, namely, whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required that a solicitor act, or be restrained from acting, in a specified way.
[10] Kallinicos and Another v Hunt and Ors (2005) 64 NSWLR 561 at [76] (Brereton J) and the authorities cited therein; see also, H Stanke & Sons v Von Stanke (2006) 95 SASR 425 at [71] (White J); Re Westgate Wool Co Pty Ltd (2006) 206 FLR 190 at [48] (Debelle J).
[11] (2006) 95 SASR 425 at [71].
The jurisdiction possessed by this Court to control its officers overlaps in operation with this Court’s supervisory jurisdiction where the Court is concerned with the conduct of one of its officers in an inferior court of this State. The rationales underpinning each jurisdiction in such a case are not materially different – the protection of the integrity of the judicial process and the maintenance of confidence in the administration of justice. So expressed the rationales invoke the same concepts as underpin this Court’s inherent jurisdiction to protect its own processes. In this latter regard, in Taylor v Attorney-General, Woodhouse J said:[12]
The inherent jurisdiction of the Court arises in relation to and for the purpose of giving proper support for the functioning of the Court as a Court of justice. It is part not of the substantive but of the procedural law; and in such a case as the present it is exercisable for the purpose of controlling not only the actions of persons associated with the proceedings but the world at large. That sort of judicial power obviously could not be used for purposes of individual or group convenience nor even for the public interest in general. Instead, as one experienced officer of the Court in England has said, ‘The juridical basis of [the inherent] jurisdiction is … the authority of the judiciary to uphold, to protect and to fulfil the judicial function of administering justice according to law in a regular, orderly and effective manner’: Master Jacob, ‘The Inherent Jurisdiction of the Court’, Current Legal Problems 1970 23, 27-28. Thus it is in the due administration of justice – at the time and for the future – that is the concern and province of the Court: not the personal but extraneous problem that may face the individual litigant or witness or Judge in some particular case.
[Footnotes omitted.]
[12] [1975] 2 NZLR 675 at 689.
It follows that, to the extent that the inherent jurisdiction is supportive of the supervisory jurisdiction,[13] the same concepts and principles that inform the exercise of the inherent jurisdiction to protect this Court’s processes will inform the exercise of the supervisory jurisdiction in and for this State where that jurisdiction is invoked to protect the integrity of the administration of justice by an inferior court of this State. Thus, just as it is within the inherent jurisdiction of this Court to deny an officer of this Court the right to act on behalf of a litigant in proceedings in this Court where otherwise permitting the officer to continue to act would undermine the integrity of the judicial process and the maintenance of confidence in the administration of justice by this Court,[14] so too, this Court may, in the exercise of its supervisory jurisdiction, restrain an officer of this Court from acting on behalf of a litigant in an inferior court of this State where otherwise permitting the officer to continue to act would undermine the integrity of the judicial process and the maintenance of confidence in the administration of justice by that court.
[13] NH v The Director of Public Prosecutions (SA) [2016] HCA 33 at [67]-[69] (French CJ, Kiefel and Bell JJ).
[14] See, for example, Abse v Smith [1986] QB 536 at 546 (Lord Donaldson MR).
It is to be emphasised that the power that this Court has in relation to its officers is exercised for the purposes of protecting and supporting the administration of justice. Consequently, its exercise is not dependent upon, nor limited to, any breach of rules of professional conduct.[15] Further, bearing in mind the purpose for which the power is exercised, any protestation by the client that they wish to continue to be represented by the particular legal practitioner, whilst a factor to be taken into account, is not determinative.[16]
[15] Everingham v Ontario (1992) 88 DLR (4^th) 755 at 761 (The Court).
[16] Afkos Industries Pty Ltd v Pullinger Stewart (A Firm) [2001] WASCA 372 at [34] (Murray J, Anderson and Steytler JJ agreeing); Everingham v Ontario (1992) 88 DLR (4^th) 755 at 761 (The Court).
It must also be remembered that it is of fundamental importance to the administration of justice that justice not only be done, but be seen to be done.[17] An appearance of injustice can every bit as effectively erode confidence in the administration of justice as the perpetration of injustice itself.
[17] R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256 at 259 (Lord Hewart CJ).

In Kallinicos and Another v Hunt and Ors, Brereton J undertook a comprehensive review of the authorities in this area.[18] From that review his Honour distilled the following propositions:[19]
[18] (2005) 64 NSWLR 561.
[19] Kallinicos v Hunt (2005) 64 NSWLR 561 at [76].
·During the subsistence of a retainer, where the court’s intervention to restrain a solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court’s jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting for clients with competing interests (Prince Jefri Bolkiah).
·Once the retainer is at an end, however, the court’s jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) (Prince Jefri Bolkiah).
·After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court’s intervention, such duty having come to an end with the retainer (Prince Jefri Bolkiah; Belan v Casey; PhotoCure ASA; British American Tobacco Australia Services Ltd; Asia Pacific Telecommunications Ltd; contra Spincode Pty Ltd; McVeigh; Sent).
·However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice (Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v Pattern Holdings; Spincode Pty Ltd; Holborow; Williamson v Nilant; Bowen v Stott; Law Society v Holt). Prince Jefri Bolkiah does not address this jurisdiction at all. Belan v Casey and British American Tobacco Australia Services Ltd are not to be read as supposing that Prince Jefri Bolkiah excludes it. Asia Pacific Telecommunications Ltd appears to acknowledge its continued existence.
·The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice (Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Holborow; Bowen v Stott; Asia Pacific Telecommunications Ltd).
·The jurisdiction is to be regarded as exceptional and is to be exercised with caution (Black v Taylor; Grimwade v Meagher; Bowen v Stott).
·Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause (Black v Taylor; Grimwade v Meagher; Williamson v Nilant; Bowen v Stott).
·The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief (Black v Taylor; Bowen v Stott).
In Coppola & Anor v Nobile & Anor, Stanley J said:[20]
There are three categories of cases in which a court will restrain solicitors from acting in a matter. First, where a solicitor seeks to act, or acts against a former client, creating a risk that the solicitor might use, or be bound to use, information which he or she holds subject to a duty of confidence to the former client. Second, where a solicitor seeks to act, or acts against a former client in circumstances which would give rise to a breach of the duty of loyalty owed by the solicitor to his or her former client as a fiduciary. Third, in circumstances where the court considers, having regard to the supervisory jurisdiction it exercises over solicitors as officers of the court, that it is necessary to restrain a solicitor 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, 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 restrained from acting.
The first category, namely, breach of confidence, involves a claim to enforce a contractual or equitable right, namely, the protection of a confidence which the solicitor is bound to maintain even after the termination of his or her retainer pursuant to the contract of retainer and / or in equity. The second category, the breach of the fiduciary duty of loyalty, depends on ordinary equitable principles derived from a solicitor’s fiduciary duty. The third category is different, depending not upon legal or equitable rights of the parties, but on the court’s inherent supervisory jurisdiction over its officers. It is the third basis for intervention that the first defendant seeks to invoke in this case.
[20] (2012) 279 LSJS 543 at [20]; also Belan v Casey [2002] NSWSC 58 at [15] (Young CJ in Eq); Newman v Phillips Fox (1999) 21 WAR 309; Bowen v Stott [2004] WASC 94 at [45]-[47] (Hasluck J).
Stanley J’s three categories approximate to the first, second and fourth dot points in the passage reproduced above from the judgment of Brereton J in Kallinicos and Another v Hunt and Ors.
In my view, the overarching concern where an application is made to restrain an officer of the court from acting in proceedings is the maintenance of the integrity of the judicial process and the maintenance of confidence in the administration of justice. The connection between the duties a solicitor owes their client and the maintenance of the integrity of the judicial process and the administration of justice are obvious. Relevantly, in Carindale Country Club Estate Pty Ltd v Astill, Drummond J referred to the “public element in the work that a solicitor does in that he is an officer of the court and, in performing his professional function, he plays an integral part in the administration of justice. In this regard he is unlike a private fiduciary.”[21] And in Murray v Macquarie Bank Ltd, Spender J said:[22]
It is important that the legal profession conduct its business in such a way as to maintain and enhance public confidence in it and in the administration of justice … The integrity of the legal profession and the perception of that integrity by the public is in large measure a consequence of the fidelity which a legal practitioner shows his client and conduct which has a tendency to jeopardise that perception of faithful commitment to the interests of the client should be prevented.
[21] (1993) 42 FCR 307 at 311.
[22] (1991) 33 FCR 46 at 49.
Further, in Kooky Garments Ltd v Charlton, Thomas J said:[23]
I am primarily concerned in this case with the principle of protecting the integrity of the judicial process. That integrity is undermined if solicitors or counsel do not possess the objectivity and independence which their professional responsibilities and obligations to the Court require of them.
[23] (1993)1 NZLR 587 at 590.
Thus this Court will not permit proceedings to be conducted by a legal practitioner to the detriment of the special relationship between legal practitioner and client that is necessary to the administration of justice if doing so has the consequence of undermining the maintenance of the integrity of the judicial process and the maintenance of confidence in the administration of justice. Bearing this in mind, in my view, all categories of case identified by Brereton J and Stanley J in the passages quoted from their judgments above may be considered within this framework. Accordingly, it is not necessary for a litigant who makes such application to bring themselves within any particular category. Nor is it necessary to devise and apply different tests dependent upon which category a particular case falls within. There will be many cases that straddle categories. This is one. That said, the three categories identified by Brereton J and Stanley J and in other cases, assist in identifying factors relevant to the exercise of the power engaged.
In Holborow & Ors v MacDonald Rudder, Heenan J said:[24]
The power of this Court to restrain a solicitor from acting in an action or other cause because of an alleged conflict of interest is not limited to those instances in which the future action of the solicitor concerned may imperil confidences of the client for whom the solicitor previously acted. It is an ample power to supervise the conduct of legal practitioners, as officers of the Court, to ensure that they do not act in any way contrary to their obligations to their former client. The broader scope of this power has frequently been referred to as ensuring “that the solicitor’s duty of loyalty to the former client is respected, notwithstanding termination of the retainer, and to uphold as a matter of public policy the special relationship of solicitor and client” – McVeigh v Linen House Pty Ltd [1993] 3 VR 394 per Batt JA at 398 and Wan v McDonald (1992) 33 FCR 491 per Burchett J at 513. Examples of this are to be found in Clay v Karlson (1997) 17 WAR 493; Afkos Industries Pty Ltd v Pullinger Stewart [2001] WASCA 372 and Re LPO Transact Pty Ltd (In Liq); Williamson v Nylant [2002] WASC 225. In those cases legal practitioners were restrained from acting in various instances where: there was a potential that the legal practitioner might be a witness in the case; where the subject matter of the litigation was likely to involve an evaluation of the conduct of the solicitor concerned and the efficacy of documents prepared by this firm; and where a solicitor was acting for a liquidator in connection with the liquidator’s investigations into the prior activities of an insolvent company where the solicitor had, prior to the insolvency, been acting for the company. In some of these cases it is obviously apposite to speak of the solicitor’s duty of loyalty to the client which continues even after the termination of the period of his retainer. This seems to be a broad general recognition of the scope of the duties which a solicitor owes to a client, even a former client, arising from the fiduciary relationship between them. As was said by Gummow J in National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209 at 228-229:
“Even among fiduciaries, solicitors stand in a special position.”
[24] [2002] WASC 265 at [23].
Here it is to be recalled that Ms Lyons’ contention on the hearing of this application is that this Court should restrain the defendants from further acting for Ms Morris because a member or members of the firm, Peter Scragg & Associates, will be a material witness in the trial, because the defendants have an interest in the outcome of the trial independent of that of Ms Morris, and because the defendants’ interest in the outcome of the trial and the interest of Ms Morris in the outcome do not necessarily align, with the consequence that there is potential for conflict. It is also contended that in the conduct of the proceedings to date the defendants have already acted in a manner furthering their own interests at the expense of those of Ms Morris. Clearly this is not a case concerning confidential information, but it is one in which there is said to have arisen a conflict between the interests of the defendants and their client, or, an apprehension of a conflict between the interests of the defendants and their client, and, in any event, an interest in the outcome of the proceedings possessed by the defendants distinct to Ms Morris’ interest. This being so, it is said there is an apprehension that in their conduct of the matter purportedly on her behalf the defendants might depart from the standard of objectivity and independence that the administration of justice demands.
In his fifth dot point Brereton J identifies the test to be applied. That test was drawn from the Canadian case of Everingham v Ontario,[25] which, in turn, applies the judgment of Sopinka J in Martin v Gray.[26] In the latter case, the Supreme Court of Canada was concerned to identify the test to be applied in determining whether a legal practitioner could act for a client in proceedings against a former client, where the legal practitioner had moved firms since acting for the former client. Sopinka J, with whom Dickson CJC, La Forest and Gonthier JJ agreed, conducted a comprehensive review of the relevant authorities including those in England and this country. Those authorities generally subscribed to one of two tests; the probability of real mischief arising or the possibility of mischief arising. Sopinka J concluded that the trend was to move toward a stricter test reflective of “a strong policy in favour of ensuring not only that there be no actual conflict but that there be no appearance of conflict.”[27] His Honour concluded:[28]
The Appropriate Test
What then should be the correct approach? Is the “probability of mischief” standard sufficiently high to satisfy the public requirement that there be an appearance of justice? In my opinion, it is not. This is borne out by the judicial statements to which I have referred and to the desire of the legal profession for strict rules of professional conduct as its adoption of the Canadian Code of Professional Conduct demonstrates. The probability of mischief test is very much the same as the standard of proof in a civil case. We act on probabilities. This is the basis of Rakusen. I am, however, driven to the conclusion that the public, and indeed lawyers and judges, have found that standard wanting. In dealing with the question of the use of confidential information we are dealing with a matter that is usually not susceptible of proof. As pointed out by Fletcher Moutlon LJ in Rakusen, “that is a thing which you cannot prove.” (at p.841). I would add “or disprove”. If it were otherwise, then no doubt the public would be satisfied upon proof that no prejudice would be occasioned. Since, however, it is not susceptible of proof, the test must be such that the public represented by the reasonably informed person would be satisfied that no use of confidential information would occur. That, in my opinion, is the overriding policy that applies and must inform the Court in answering the question: Is there a disqualifying conflict of interest? In this regard, it must be stressed that this conclusion is predicated on the fact that the client does not consent to but is objecting to the retainer which gives rise to the alleged conflict.
Typically, these cases require two questions to be answered: (1) Did the lawyer receive confidential information attributable to a solicitor-and-client relationship relevant to the matter at hand? (2) Is there a risk that it will be used to the prejudice of the client? [29]
[25] (1992) 88 DLR (4^th) 755.
[26] (1990) 77 DLR (4^th) 249.
[27] (1990) 77 DLR (4^th) 249 at 266.
[28] (1990) 77 DLR (4^th) 249 at 267.
[29] I do not pause to analyse the minority opinion because it is limited in its application to cases involving the risk of misuse of confidential information. The minority opinion is to be found in the judgment of Cory J, with whom Wilson and L'Heureux-Dube JJ agreed. Cory J was of the opinion that the appropriate test was one that had to protect the integrity of the administration of justice first and foremost. He preferred a presumptive test in the following terms:
"Where a lawyer who has had a substantial involvement with a client in an ongoing contentious matter joins another law firm which is acting for an opposing party, there is an irrebuttable presumption that the knowlege of such lawyer, including confidential information disclosed to him or her by the former client, has become the knowledge of the new firm. Such an irrebuttable presumption is essential to perserve public confidence in the administration of justice." Martin v Gray (1990) 77 DLR (4th) 249 at 276.
Ms Lyons contended that the test referred to by Brereton J in his fifth dot point – the Sopinka J test – should be applied in this case. The defendants made no submission to the contrary.
The parallels between Sopinka J’s test and the test applied by courts of this country on an application for apprehended bias are obvious. The tests in each instance give effect to the requirement that justice must not only be done, but be seen to be done. In particular, both tests account for the appearance of injustice and the perceived undermining of confidence in the administration of justice. Further, the tests inject objectivity[30] into the analysis and account for the “possibility of human frailty”.[31]
[30] Smith v Roach (2006) 227 CLR 423 at [97] (Kirby J).
[31] Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [8] (Gleeson CJ, McHugh, Gummow and Hayne JJ).
In Ebner v Offical Trustee in Bankruptcy Gleeson CJ, McHugh, Gummow and Hayne JJ said:[32]
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.
[32] (2000) 205 CLR 337 at [8].
In my view a similar approach must be adopted in a case such as this. It accords with Sopinka J’s approach in that the two questions he postulates at the conclusion of the passage reproduced from his Honour’s judgment above perform the function of the two steps to which Gleeson CJ, McHugh, Gummow and Hayne JJ refer in Ebner. Thus, what is said might lead an officer of this Court to depart from the standard of independence and impartiality in the discharge of his or her duty of loyalty to their client in acting for that client in proceedings should be identified with some accuracy. Then the connection between the litigation and the apprehended departure should be articulated. Once that has been done the fair minded lay observer test is to be applied.
Ebner also establishes that in the case of apprehended bias the relevant question is framed in terms of what the fair minded lay observer might reasonably apprehend.[33] It is a matter of possibility, real and not remote, not probability.[34] In this respect I see no obvious reason for applying the fair minded lay observer test any differently in the context of an assertion that an officer of the court should be restrained from acting for a particular client for fear of a departure from the standard of independence and impartiality in the discharge of his or her duty of loyalty to their client such as would undermine the integrity of the judicial process and the maintenance of confidence in the administration of justice. I appreciate that the required independence and impartiality of a legal practitioner is of a different order to that of a member of the judiciary, but such difference is accounted for by crediting the fair minded lay observer with knowledge of the same.
[33] Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6]-[7] (Gleeson CJ, McHugh, Gummow and Hayne JJ).
[34] Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [7] (Gleeson CJ, McHugh, Gummow and Hayne JJ).
In this Court in the matter of Viscariello v Legal Profession Conduct Commissioner, Parker J applied Brereton J’s formulation of Sopinka J’s test in a case concerning an asserted apprehension of conflict between the interests of counsel for the Commissioner and his client, the possibility of a breach of the duty of confidence by counsel, and the possibility that counsel may become a witness.[35] Importantly Parker J considered the question of the knowledge with which the fair minded lay observer was to be credited. Drawing upon the authorities concerning the knowledge to be attributed to the fair minded lay observer in cases of apprehended bias, Parker J determined:[36]
[35] [2015] SASC 4.
[36] [2015] SASC 4 at [22]-[28].
The test of what a “fair-minded, reasonably informed member of the public” might conclude is also applied when a court determines if there was a reasonable apprehension of bias so as to disqualify a judge or other decision-maker on the ground of apprehended bias. Thus, cases dealing with that issue are of assistance in this matter.
A crucial issue is the level of knowledge that is to be attributed to the fair-minded, reasonably informed member of the public. The relevant principles have been discussed by Aronson and Groves in Judicial Review of Administrative Action (5th ed, 2013) at [9.90] in the context of the disqualification of judges based on past work as a barrister. The learned authors stated:
The observer is, however, credited with an understanding of barristers’ working conditions in general, at least those relating to the cab-rank principle, their general independence and distance from their clients, their readiness to disagree with those who might be their closest professional and personal friends, to agree with arguments from colleagues for whom they have little respect and to make strong statements on the instructions of others.
The level of knowledge to be attributed to the hypothetical observer was considered by the New South Wales Court of Appeal in S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd. The issue before the court was whether a judge should be disqualified because he had previously often appeared as counsel for the defendant, Caltex. Priestly and Clarke JJA held (with Kirby P dissenting) that the hypothetical bystander could not be regarded as reasonable if they had not informed themself as to the way in which barristers work.
The hypothetical independent observer must be taken to understand the ethical principles under which a barrister, such as Mr Harris, must operate and the high importance attached to those principles by members of the legal profession and the courts. The observer must know that a barrister is required always to act in the best interests of his client whilst also acting in accordance with strict ethical obligations and the law.
The observer must also be taken to understand that the “cab rank principle” requires a barrister, such as Mr Harris, who is available and not disqualified by a conflict or on other grounds to take a brief in relation to a matter that is within his or her professional competence and where the fees are acceptable. Upon taking the brief, the barrister must act in accordance with the principles that I have referred to in the preceding paragraph.
The observer must also know that Minter Ellison understand that Mr Harris is required by the cab rank principle to accept the brief from Mr Bourne as delegate of the Commissioner unless one of the exceptions to that principle applies.
The hypothetical observer must also be aware that Mr Harris has acted for clients of Minter Ellison rather than the firm itself. They must also know that clients who may have considerable experience with litigation, particularly in specialised fields such as defamation and medical negligence (ie publishers and professional indemnity insurers), may express a firm view as to their preferred counsel based on prior satisfactory experience. Thus, the views of the solicitors may not necessarily determine the choice of counsel.
[Footnotes omitted.]

Having regard to the above, while I am careful not to attribute the knowledge of a legal practitioner to the fair minded lay observer,[37] in this case, in my view, a fair minded lay observer must be taken to know generally of the duty of loyalty that a solicitor owes their client, that a solicitor has professional indemnity insurance for which they pay a premium, and that if a solicitor is negligent in the discharge of their duties to the client then the client may have a cause of action against the solicitor who may then claim upon their insurance.
The conduct of the matter in this Court
[37] See Webb v R (1994) 181 CLR 41 at 52 (Mason CJ and McHugh J); Concrete v Parramatta Design (2006) 229 CLR 577 at [177] (Callinan J).
A preliminary matter
In the conduct of her case in this Court Ms Lyons sought to deploy correspondence that her solicitors had received from Ms Morris’ solicitors in the course of the conduct of the Magistrates Court proceedings. For this purpose, Ms Lyons applied for an order releasing her from the implied undertaking not to use the said correspondence for any purpose other than in the conduct of the Magistrates Court proceedings and, more particularly, to be permitted to use that correspondence in this matter. The defendants made no submission in opposition to the order being made. I made the order. I record here my reasons for doing so.
The correspondence comprised two letters, both written to Ms Morris by solicitors in the employ of Peter Scragg & Associates. The letters were produced in compliance with an order made in the Magistrates Court proceedings on 10 May 2016.[38] That order was made in the light of the dispute regarding the application for an extension of time.
[38] See above at [40].
The first letter is dated 15 September 2014, approximately six days after the Magistrates Court proceedings were instituted on Ms Morris’ behalf. The letter makes no mention of the proceedings being out of time, rather it refers to the accident having occurred three years ago, that Ms Morris’ claim must be filed within that time, and states that “in order to preserve your claim we have issued proceedings in the Magistrates Court”.
The second letter is dated 19 March 2015. This letter refers to a telephone conversation of 9 September 2014 in which Ms Morris was advised that proceedings had been issued in the Magistrates Court in order to preserve her claim as was confirmed in the letter sent to her dated 15 September 2014. The letter then refers to a reference in the letter of 15 September 2014 to the need to file a claim within three years. The letter then advises Ms Morris that her claim was filed out of time causing the insurer to cancel a settlement conference and notify Peter Scragg & Associates that it will object to any application for an extension of time. The letter further advises Ms Morris that Peter Scragg & Associates will seek an extension of time “on the basis that the insurers had or should have had knowledge of your claim being filed seven days after the relevant time limit, and should have at that time raised the issue.” The letter then refers to the insurer’s conduct post the filing of the claim as indicative of an absence of any prejudice flowing from the failure to file in time as a matter that will also be raised on the application for an extension of time. The letter concludes by advising Ms Morris that an extension of time cannot be guaranteed.
The two letters are indicative of Peter Scragg & Associates’ treatment of Ms Morris relevant to the issue subject of these proceedings. I formed the view, bearing in mind the nature of the case that Ms Lyons runs in this Court, that the content of the letters gave rise to questions germane to these proceedings, in particular, whether Peter Scragg & Associates has been full and frank in its dealings with Ms Morris regarding the filing of her claim out of time. Such line of inquiry is relevant to any conclusion concerning actual or apprehended conflict or the existence of an actual or apprehended interest that may impede Peter Scragg & Associates acting with the degree of independence and impartiality that the administration of justice demands.
Special circumstances must be established if a litigant is to be released from the implied undertaking and permitted to deploy documents provided to them under compulsion to a purpose other than that for which they were provided.[39] In Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors Kourakis J, as his Honour then was, said:[40]
The onus of persuading the Court to exempt a party from the rule of preclusion falls on the party seeking the exemption. The party seeking an exemption must establish special circumstances. Special circumstances may exist where the rationale for the rule is inapplicable or does not apply with as much force as it does in the generality of cases or where there is a strong public interest in allowing the use of the document. That public interest will usually need to be an interest other than, or transcending, the mere private advantage to the other party to the proceeding.
[Footnotes omitted.]
[39] Hearne v Street (2008) 235 CLR 125 at [107] (Hayne, Heydon and Crennan JJ).
[40] [2012] SASC 12 at [186].
The rationale for the requirement that special circumstances be established is to minimise the invasion of a litigant’s privacy and confidentiality of affairs to the purpose to be served by the order compelling production.[41] In my view that rationale does not apply with equal force in this case. That is because, had the Magistrate had the power to restrain Peter Scragg & Associates, an issue about which I express no opinion, there could have been no question that the documents could not have been deployed in the course of the trial in support of the application. Further, had this matter proceeded by way of pleadings and/or an order of disclosure made, it is likely that the correspondence would have been pleaded and disclosed. Further again, the letters were disclosed in response to an order from the Magistrates Court that enabled Ms Lyons, if she considered it appropriate, to deploy them in resisting the application for an extension of time. In that connection the potential use of the letters in this matter overlaps with their potential use in the Magistrates Court proceedings. Both proceedings will traverse when Ms Morris was informed that her claim was instituted out of time, why and how that occurred, and the consequences thereof. Lastly, the deployment of the letters in this case, being in support of an application that the supervisory jurisdiction be exercised to protect the integrity of the administration of justice by the Magistrates Court, attracts a strong public interest that transcends the interests of Ms Morris.
[41] Harman v Secretary of State for Home Department [1983] 1 AC 280 at 308 (Lord Keith of Kinkel); Hearne v Street (2008) 235 CLR 125 at [107] (Hayne, Heydon and Crennan JJ).
In arriving at my conclusion I also took into account the fact that Ms Morris did not see fit to attend Court and make any submission in opposition to Ms Lyons’ application. I infer from her attitude toward these proceedings that the invasion of her privacy and confidentiality regarding her affairs, and any prejudice that she may be occasioned should the application be granted, is not significant. The attitude of the defendants to the application suggests the same conclusion applies to them. In each instance this is, perhaps, not surprising, bearing in mind the overlap in the forensic use of the letters to which I have referred.
For these reasons I was satisfied that special circumstances existed and that, in the exercise of my discretion, it was appropriate to grant leave to Ms Lyons to use the two letters written by Peter Scragg & Associates and addressed to Ms Morris, dated 15 September 2014 and 19 March 2015, in these proceedings.
Affidavits received and the right to cross-examine
The trial in this Court proceeded on affidavit as provided for by r 168(2) of the Supreme Court Civil Rules 2006 (SA).
Ms Lyons’ case comprised the tender of five affidavits sworn by Fiona Elizabeth Brady on 1 June 2016, 15 June 2016, 16 June 2016, 24 June 2016 and 13 July 2016 and the exhibits referred to in each. Ms Brady’s affidavits largely recount the history of the proceedings in the Magistrates Court and the exchange of correspondence between the defendants, Allianz and Ms Lyons’ solicitors relevant to this matter. No objection was taken to the reception of those affidavits and no application was made to cross-examine Ms Brady. I have relied upon the content of Ms Brady’s affidavits and the exhibits thereto in summarising the history of this matter above.
As indicated Ms Morris chose not to take an active part in this matter.
The defendants sought to tender two affidavits in their case – one sworn by Ms Morris on 2 June 2016 and one sworn by Mr Scragg on 4 July 2016. They indicated they would resist any application to cross-examine either Ms Morris or Mr Scragg.
Rule 170 of the Supreme Court Civil Rules 2006 (SA) provides:
(1) If evidence is to be tendered at trial in the form of an affidavit or expert report, another party to the action may, by written notice given to the party not more than 14 calendar days after the later of—
(a) the order that the evidence is to be tendered in that form; or
(b) service of the affidavit or expert report,
require the party for whom the evidence is to be given to produce the witness for cross-examination at trial.
(2) A party must comply with a requirement under subrule (1) unless the Court determines that it is unreasonable.
It was not disputed that Ms Lyons had given the requisite written notice in relation to both Ms Morris and Mr Scragg for the purposes of r 170(1).
Mr Scragg was available to be cross-examined. Despite this, counsel for the defendants contended that it was unreasonable for him to be produced for cross-examination because the topics likely the subject of cross-examination could conceivably stray into matters subject to legal professional privilege. Counsel added that the privilege was not Mr Scragg’s to waive and that Ms Morris would be entitled to be heard on the question of any waiver.
I considered that any risk to Ms Morris and the maintenance of privilege, and any question of the possible waiver of privilege, would have to be considered on a question by question basis. Accordingly, I was not satisfied that it was unreasonable for the defendants to produce Mr Scragg for cross-examination. Subsequently Mr Scragg entered the witness box and was cross-examined. I deal with his evidence below.
Without objection I received a medical certificate indicating that Ms Morris’ current state of health was such that she could not attend Court. I was satisfied that Ms Morris was not fit to attend and that it would have been unreasonable for the defendants to comply with r 170(1) of the Supreme Court Civil Rules 2006 (SA) and produce Ms Morris for cross-examination. The question that then arose was whether Ms Morris’ affidavit should be received. Counsel for Ms Lyons did not object to the tender of Ms Morris’ affidavit, however he made plain that, in the absence of her being produced for cross-examination in circumstances where Ms Lyons had indicated that she wished to cross-examine Ms Morris, he would submit in address that the facts deposed to by Ms Morris in her affidavit could attract little if any weight. Despite this indication and the attendant risk, the defendants did not seek an adjournment of the proceedings to a day when Ms Morris would be fit to attend. As Ms Lyons did not object to the tender of Ms Morris’ affidavit, and neither party sought an adjournment, I admitted the affidavit of Ms Morris pursuant to r 169(1) of the Supreme Court Civil Rules 2006 (SA).
In her affidavit Ms Morris:
-Indicated that she was aware that the proceedings in the Magistrates Court instituted on her behalf were instituted eight days out of time and was advised of this on 9 September 2014;
-Stated that she understood that if she fails in her application for an extension of time then she may make a claim against Peter Scragg & Associates for her loss;
-Expressed the wish that Peter Scragg & Associates continue to represent her in the Magistrates Court proceedings.
-Advised that Peter Scragg & Associates was acting for her in two unrelated matters and had acted for other members of her family over the past 20 years;
-Expressed a desire for the Magistrates Court proceedings to be finalised as quickly as possible and concern at the delay that might arise from having to seek new solicitors; and
-Stated she was happy with the appointment of an independent barrister to act as her counsel in the Magistrates Court proceedings and that she found the barrister to be approachable, was confident that he would act in her best interests and was happy for him to provide her with independent advice as required.
-Claimed Peter Scragg & Associates knew her case and had been upfront and direct with her regarding the time issue and the possibility of retaining other solicitors to act for her. She said she had established a rapport with those who have worked on her matter since Mrs Scragg ceased to do so.
-Stated that she had been advised by each of counsel, Mr Scragg and a solicitor employed by Peter Scragg & Associates of her right to retain other solicitors to act on her behalf. She said she chooses not to do so.
The evidence of Peter Scragg
At paragraph 3 of his affidavit Mr Scragg states:
3. In breach of our client’s general implied instructions my firm failed to issue Action within 3 years of the accident, being the time limit prescribed by section 36 of the Limitation of Actions Act 1936 (SA) (the Act). The Magistrates Court Action was filed on 9 September 2014, eight days after the limitation period expired, and contained a plea seeking an extension of time for their institution. I acknowledge however, that the failure to institute the Magistrates Court Action on or before 1 September 2014 was an oversight made by the practitioners of my firm.
In his evidence in this Court Mr Scragg said that Rosita Scragg, his wife, was initially principally responsible for Ms Morris’ file. By March 2015, however, much of the day to day work was being done by the firm’s associate. He added that Mrs Scragg continues to be a partner of Peter Scragg & Associates but is now no longer involved in Ms Morris’ matter.
Mr Scragg said that it was he who first realised the claim was out of time in the course of settling the then draft claim. That occurred on 8 September 2014. He raised the issue with his wife and was advised that time would not be an issue. He agreed in cross-examination that the application for an extension of time had been imperfectly pleaded in the claim. He said that he had not turned his mind to the requirements of s 48 of the Limitations of Actions Act 1936 (SA), but reiterated that he and his wife understood the time limitation point would not be taken by Allianz, and, consequently, was not too concerned at the claim having been filed out of time. He added that this had occurred in numerous other matters involving Allianz and had not prevented the ongoing negotiation of claims to settlement.
In this matter Mr Scragg said his firm continued to negotiate with Allianz on behalf of Ms Morris throughout the six months following the institution of proceedings. Mr Scragg said that Allianz’s attitude to the time limitation issue changed in March 2015. It was at that time that he notified Law Claims of the potential for a negligence claim to be made against Peter Scragg & Associates.
Mr Scragg agreed that his firm never served Ms Morris’ claim on Allianz. He said that it was his firm’s normal practice to issue but not serve proceedings. That practice had grown from an understanding of Allianz’s practices, namely, that Allianz was happy to negotiate a claim itself but would, upon the issue and service of proceedings, pass the matter on to its solicitors. He said Allianz preferred that claims not be served as it assisted in keeping costs down. In this matter his firm had been in negotiations with the Allianz since sometime in 2012.
Mr Scragg agreed that he was obliged under his policy of insurance to inform his insurer of a claim as soon he became aware of circumstances that gave rise to such claim. He denied that he was obliged in this case to advise his insurer until it was indicated that the time point would be taken. His firm notified Law Claims of the possible claim on 11 March 2015 after receiving a letter from Allianz dated 10 March 2015 indicating that any application for an extension of time would be opposed. He repeated that, up until then, and despite knowing the claim to have been filed out of time, he believed time was not an issue. He was reinforced in this belief by the fact of negotiations continuing. Since notifying Law Claims, Peter Scragg & Associates has kept Law Claims appraised of all steps in the Magistrates Court proceedings and these proceedings.
Prior to Allianz’s change in attitude, Mr Scragg said his firm continued to assemble the evidence in support of Ms Morris’ claim. He added that the issue of the claim served a second purpose; a foundation upon which he could subsequently apply for costs if they could not be successfully negotiated. Accordingly, bearing in mind Allianz’s preferred approach to claims, it was his practice to issue proceedings but not serve the same.
Mr Scragg agreed that in the six month period post the filing of the claim, no-one from his firm informed the insurer that the claim had been filed out of time.
Mr Scragg agreed that, after Allianz indicated that it would oppose an application for an extension of time, he informed Ms Lyons’ solicitors that he would not negotiate a discount as part of any settlement to reflect the risk of not succeeding on such application. In putting this position he could not recall if he was acting on express instructions. His client, he said, relied upon Peter Scragg & Associates to negotiate the best outcome for her. It was he said, a negotiation position. Had an offer been made, or a discount sought, he would have communicated it to his client. He said he was met by a response to the effect that there would be no offer as Ms Morris was certain of losing. It was then that he engaged counsel to recast the claim.
Mr Scragg said that he did not think that he was in a position of conflict between his personal interests and the duties he owed Ms Morris during his negotiations with Ms Lyons’ solicitors.
Mr Scragg was cross-examined about his firm’s letter of 19 March 2015. The thrust of the cross-examination was that the letter failed to adequately advise Ms Morris of the requirements of s 48 of the Limitations of Actions Act 1936 (SA) and the attendant risks. He agreed that a week later Peter Scragg & Associates received a letter from Ms Lyons’ solicitors advising that the application for an extension of time had to be properly pleaded. He indicated this was achieved by briefing the matter to counsel. He had not at this time turned his mind to solicitor error being pleaded in support of the application for an extension of time. What was to be pleaded in support of the application was left to counsel to determine.
Mr Scragg was also cross-examined about his firm’s letter of 15 September 2014. He said he could not recall whether he was involved in either drafting or settling the letter.
Mr Scragg accepted that solicitor error was first pleaded in May 2016 and then only after prompting by Ms Lyons’ solicitors. He stated that he was of the view that solicitor error was so obvious that it did not need to be expressly pleaded. Mr Scragg said that he never denied that the error was the fault of his firm and he claimed to have admitted as much to the Magistrate at a directions hearing in April 2016. Mr Scragg’s evidence was that he advised the Magistrate that he had engaged independent counsel on the basis that his firm was at fault for the late filing of the proceedings.

I appreciate that in this Court this matter was fought largely on the basis that Mrs Scragg would give evidence. However, as I have indicated, the cross-examination of Mr Scragg in this Court on his involvement in the conduct of Ms Morris’ matter, particularly after the claim was filed and up to 10 March 2015, gives rise to the real and substantial risk that he too will give evidence, or, failing that, another member of the firm. Ultimately, whoever from Peter Scragg & Associates gives evidence, that evidence will be material to the exercise of the discretion to grant an extension of time should that discretion be enlivened.
Accepting that Mrs Scragg is a material witness and that Mr Scragg or another member of Peter Scragg & Associates, if he or they do give evidence, would also be material witnesses, what is it that might lead them as officers of this Court to depart from the standard of independence and impartiality demanded by the administration of justice and critical to the maintenance of the integrity of the judicial process?
In Mitchell v Burell, disclosed letters written by the plaintiff’s instructing solicitor were relevant to the disputed question of whether an agreement existed between the parties, the terms of the agreement, and whether the plaintiff had obtained legal advice. The consequence was that the plaintiff’s solicitor was likely a material witness. Brereton J said:[44]
20. That said, I do not accept that the mere circumstance that a solicitor will be a material witness, even on a controversial matter, of itself justifies restraining the solicitor from continuing to act. As Windeyer J pointed out in Scallan v Scallan [2001] NSWSC 1078, it is, for example, not unusual for instructing solicitors in contested probate proceedings to give evidence of facts relevant to instructions for and execution of a Will. Similarly, in contested conveyancing proceedings, it is not unusual for solicitors who have acted on the conveyance to continue to act in the proceedings for specific performance or rescission and to give evidence in those proceedings. Accordingly, despite Rule 19 of The Law Society of New South Wales Professional Conduct and Practice Rules, which imposes a professional obligation (as distinct from a private right), I do not accept that in every case where a solicitor acting for a party is a material witness even on a controversial matter, the Court will restrain the solicitor from continuing to act. Although some observations of Campbell CJ in Chapman v Rogers; ex parte Chapman[1984] 1 Qd R 542, 545, may go somewhat further, the cases indicate – as Campbell CJ did in that case itself – that the line is crossed only when the solicitor has a personal stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees for acting, albeit that the relevant stake may not necessarily be financial, but involves the personal or reputational interest of the solicitor, as will be the case if his or her conduct and integrity come under attack and review in the proceedings. The presence of such circumstances will be a strong indication that the interests of justice – which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests – require the lawyer to be restrained from continuing to act.
21. The point is illustrated, in Windeyer J's judgment in Scallan (at [10]), by his Honour’s reference to the difference between the case where the (mere) interest of a solicitor is one that arises simply in supporting the success of his or her client (for example, in connection with advice about discovery or the commencement or continuation or abandonment of proceedings), and the case where the solicitor has an interest in the result of an action "additional to his interest in doing his best for a client to have success in an action". Similarly, in Kooky Garments Ltd v Charlton [1994] 1 NZLR 587, Thomas J recognised the distinction between the situation where solicitors were, in effect, called on to defend their own actions or advice on the one hand – in which case it was inappropriate that they act – and other cases (at 589-590):
What I have said, of course, does not apply where the advice given is unrelated to liability or the question in dispute. Advising a client to prosecute or defend a claim does not attract these observations. They are restricted to the situation where the acts or omissions of the solicitors are an integral part of the other party's complaint or the client has been sued in circumstances where he or she was acting on the advice of their solicitors and it is effectively that advice which is in issue. In such cases, apart altogether from the position of the client, the Court is not receiving the assistance of counsel who are observably independent. Independence is a function of counsel. The Court is entitled to assume that solicitors and counsel appearing before it possess that independence.
[44] [2008] NSWSC 772.
And in Afkos Industries Pty Ltd v Pullinger Stewart (A Firm), where the relevant solicitors, although under the style of a different firm, were the very solicitors subject of proceedings alleging that they were responsible for the appellant’s failure to mitigate its loss, Murray J, with whom Anderson and Steytler JJ agreed, said:[45]
32. In my opinion there can be no doubt that in a real sense, upon this issue, the lawyers would be required to defend their professional conduct and while it might also, in the context of this litigation, be in the interest of the appellant that they should do so successfully, there is nonetheless a real danger that the court would lose the assurance of the independence and objectivity of their representation of their client. In a real sense, the fact that their conduct was so integrally identified with an issue put against the appellant by the respondent in the litigation made manifest the danger against which it was proper for the Court to guard by the injunction it granted.
33. That danger was that the credibility of our system of litigation depends heavily on the integrity of its processes. Litigants, members of the public and the court itself require the assurance that practitioners performing their important role in representing clients and as officers of the court will not do so in circumstances where their conduct of litigation may be distorted by a personal interest in the outcome, which must have the effect of detracting from their independence. Cases where there is a conflict of interest between legal practitioner and client are simply one type of case (usually providing a clear example) where having regard to that fundamental principle, the court will exercise its inherent power to restrain a practitioner from acting.
[45] [2001] WASCA 372
I pause to note that the Australian Solicitors’ Conduct Rules, as adopted by the Law Society of South Australia, provide:
27.1 In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the court, the solicitor may not appear as advocate for the client in the hearing.
27.2 In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the court the solicitor, an associate of the solicitor or a law practice of which the solicitor is a member may act or continue to act for the client unless doing so would prejudice the administration of justice.
In line with Mr Scragg’s evidence in this Court, it may be expected that Mrs Scragg will give evidence in the Magistrates Court accepting that she was at fault in not instituting Ms Morris’ claim within time. It can be expected that she will be cross-examined about what she did or did not do, and, possibly, about the relevant systems and practices of the firm. Her professional integrity and that of the firm will be evaluated. In my view, Peter Scragg & Associates’ conduct of the matter is “integrally identified with the issue put against” Ms Morris. The nature of Mrs Scragg’s shortcomings or those of the firm are integral to the weight to be given to the mitigatory effect of the explanation Ms Morris provides for her claim not being instituted in time and the exercise of the discretion to extend time generally.
Clearly Mrs Scragg will be interested in supporting Ms Morris’ success. However, equally clearly, supporting Ms Morris serves Mrs Scragg’s own purposes and, indeed, the purposes of Peter Scragg & Associates, in that success on the application for an extension of time would see the adverse consequences for Ms Morris that would likely arise from Peter Scragg & Associates’ failure to institute the proceedings in time largely evaporate. That, in turn, would see the consequences for Peter Scragg & Associates and Mrs Scragg of their failings significantly abate, and perhaps disappear. Certainly it was Peter Scragg & Associates’ mindset that the failure to institute proceedings in time was not an obstacle to negotiating the claim to settlement provided the time point was not taken. That is, their negligence was a non-issue if a negotiated settlement was reached.
It can be expected that this motivation will be tested in the Magistrates Court. It is also possible that despite any protest that Ms Morris was in no way responsible, counsel for Ms Lyons may nonetheless explore that issue. Significantly, the fact that Peter Scragg & Associates admits negligence does not render the issue of why the claim was instituted out of time moot. Nor does the concession that Peter Scragg & Associates was negligent mean that Mrs Scragg, Mr Scragg or Peter Scragg & Associates ceases to have an interest in the outcome of the application for an extension of time.
It is the interest that Mrs Scragg and Peter Scragg & Associates have in admitting their failings in order that Ms Morris secure an extension of time which gives rise to the apprehension that they may no longer be independent and impartial in their conduct of her matter. Mrs Scragg and Peter Scragg & Associates have an interest in the outcome of the application distinct from their interest in supporting the success of their client by the discharge of their professional obligations in acting for her. The same may be said in relation to the evidence that Mrs Scragg or Mr Scragg or a member of Peter Scragg & Associates may give in support of the waiver argument. Here too Peter Scragg & Associates’ conduct is integrally identified with the issue. In each respect a tension is introduced into the trial between advancing the client’s, the firm’s and Mrs Scragg’s interests on the one hand, and acting in compliance with the practitioner’s duty to the court to be frank on the other. If Peter Scragg & Associates continue to act for Ms Morris, the proceedings in the Magistrates Court go forward overshadowed by the apprehension of Mrs Scragg and Peter Scragg & Associates being tempted to tailor their evidence to secure the desired outcome which happens to be the outcome that also suits their client. What stands to suffer is the perception of officers of this Court acting in a manner detached and objective, free of any personal interest in the outcome, and in whom the community can have confidence that they will discharge their duty to the court to be frank. That that perception is real was highlighted in this Court in Mr Scragg’s exasperation at Allianz’s seeming about face as of 10 March 2015. I make no finding in this regard save to record my observation of Mr Scragg’s earnestness in impressing upon the Court the change in position. That earnestness manifestly demonstrated the extent to which Peter Scragg & Associates are invested in, or integrally linked to, the issue in dispute which, in turn, fuels the apprehension that the firm is no longer observably independent.
At this juncture it is appropriate to make reference to the contentions made by Ms Lyons that aspects of the conduct of Ms Morris’ claim in the Magistrates Court to date evince an intent on the part of Peter Scragg & Associates, witting or unwitting, to act in its own best interests. Here I am concerned with allegations of the actual, not the apprehended, but what is said to have occurred, if accepted, may be deployed in support of what may be apprehended.
Before turning to deal with the specific allegations I make plain that I found Mr Scragg to be a credible witness. There was nothing in his demeanour or in the way in which he gave his evidence that caused me to think otherwise. In fact, his exasperation, expressed at times with his cross-examiner in a context where he was particularly concerned to accept responsibility and concede that his firm had acted negligently, coupled with his willingness to accept where pointed out that he could have done things better, left me with a favourable impression as to his truthfulness.
As mentioned, Mr Scragg told this Court that Mrs Scragg advised him on the evening of 8 September 2014 that the question of time would not be an issue. He also informed the Court that he had in the past, on a number of occasions, continued to negotiate matters to settlement with Allianz despite those matters being instituted out of time. Further, he advised the Court of his firm’s practice of instituting claims but not serving the same where Allianz was involved. He was not challenged on any of this. His involvement in, and the partnership’s conduct of, Ms Morris’ matter from the date of filing the claim until 10 March 2015 largely accords with Mr Scragg’s understanding that the extension of time was a non-issue. It explains in part why the letter of 15 September 2014 was not as fulsome in the information it contained regarding the proceedings being instituted out of time as it might have been, it explains the initial cursory pleading in relation to the issue of time, it explains why the claim was not served, it explains why Peter Scragg & Associates agreed to attend a settlement conference despite the claim being out of time, and it explains why he did not report the prospect of a claim being made against the firm to Law Claims until March 2015. In short, Mr Scragg’s evidence is generally consistent with the objective evidence regarding the conduct of Ms Morris’ matter in the period between 9 September 2014 and the receipt of the Allianz letter of 10 March 2015. This conclusion reinforced my view that he was a credible witness.
I turn to the specific instances where it is alleged Peter Scragg & Associates has demonstrated an intention to act in its own interests in the conduct of Ms Morris’ matter.
Ms Lyons points to the letter of 15 September 2014 and describes it as misleading for failing to refer to the fact that the claim was instituted out of time. Coupled with this is the fact that the proceedings were instituted out of time without Ms Morris first being advised of the risks attendant upon doing so, and without her having the opportunity to obtain independent advice. Ms Lyons then refers to the letter of 19 March 2015. That letter did advise Ms Morris that her claim was instituted out of time but again, failed to advise that Peter Scragg & Associates were at fault, that consequently Ms Morris had a claim against Peter Scragg & Associates, and that Ms Morris should, as a result, seek independent legal advice as to her future options. The letter also advises that on Ms Morris’ behalf Peter Scragg & Associates intended to seek an extension of time. However, that had already been done, seemingly without instructions, and, it is said, in pursuit of Peter Scragg & Associates’ own interests.
Ms Lyons then refers to the failure by Peter Scragg & Associates to serve the claim upon Allianz or inform Allianz that the claim was instituted out of time and yet proceed to arrange a settlement conference. The contention is that so proceeding, Peter Scragg & Associates deliberately avoided revealing the fact that proceedings had been instituted out of time.
Lastly, Ms Lyons refers to the Fourth Amended Claim filed after counsel for Ms Morris had completed his opening of the trial. She points to the Fourth Amended Claim no longer pleading that the failure to institute the proceedings in time was as a consequence of conduct moving from Allianz and the deletion of an estoppel argument and suggests that this was done to avoid Mrs Scragg having to give evidence on these issues.
Many of these contentions were put to Mr Scragg in cross-examination. In his evidence before me Mr Scragg conceded that his firm did not serve Ms Morris’ claim upon Allianz. Mr Scragg explained the non-service of the claim as reflecting Allianz’s wish that this not occur as a matter of course as it would have the internal consequence that the claim would then be forwarded to Allianz’ solicitors with the consequent incursion of cost. He added that the Motor Accident Commission, for whom Allianz acted as claims manager, would have been aware of the claim when it was issued because of an administrative arrangement between the Commission and the Magistrates Court whereby the Commission is advised of all claims relevant to it. This is borne out by the Allianz letter of 10 March 2015.
Ms Lyons did not call any evidence to suggest that Mr Scragg’s understanding of Allianz’s preferred approach was a fabrication or in any way misconceived. Nor did Ms Lyons challenge Ms Scragg’s evidence to the effect that he had on numerous occasions in the past negotiated claims to settlement with Allianz despite those claims being instituted out of time.
I am not persuaded that in instituting proceedings when and in the manner it did, Peter Scragg & Associates was motivated by self-interest. The letter of 15 September 2014 refers to a telephone conversation of 9 September 2014 between Peter Scragg & Associates and Ms Morris. In her affidavit Ms Morris says she was advised that her claim was out of time on 9 September 2014. I do not know who made the telephone call. Mr Scragg was not asked. I know nothing of the content of the call, save what Ms Morris states. Below I deal with the weight that may be given to Ms Morris’s evidence in these proceedings. Suffice it to say I am not persuaded that she was not advised on 9 September 2014 of the fact that her claim had been instituted out of time.
True it is that the letters of 15 September 2014 and 19 March 2015 do not contain information that the counsel of perfection would advise. And, those matters may in another forum reflect upon the professional standards of Peter Scragg & Associates. But the focus of this application is upon the perceived risk of Mrs Scragg and Peter Scragg & Associates acting in furtherance of a material interest distinct to that of their client or of them having been proven to have done so.
I accept Mr Scragg’s evidence that prior to receiving Allianz’s letter of 10 March 2015 it was not considered by Peter Scragg & Associates that the claim being instituted out of time would be an issue. Consequently, I am satisfied that whatever else may be said about the manner in which the matter was conducted on Ms Morris’ behalf, to that point in time Peter Scragg & Associates acted only in pursuit of her interests. I appreciate the first claim did plead an application for an extension of time. I do not consider this fatal in any respect to my conclusion. An extension was required as a matter of law. I take Mr Scragg’s evidence to indicate he expected it would be granted, it having been indicated to him that the time point would not be taken. As I have said, that explains the cursory nature of the pleading itself and, indeed, the inadequacy with which the issue is dealt with in the letter of the 15 September 2014. But more to the point, my impression from Mr Scragg’s evidence was that the claim was largely a holding position or precautionary act, in that what was expected was a negotiated settlement, not a trial. The claim preserved Ms Morris’ position in the event that the primary approach failed, including preserving an avenue for Mr Scragg to seek costs if they also could not be negotiated to an agreed settlement. Mr Scragg’s conduct of the matter after the claim was issued and up to March 2015 is, as I have already stated, generally consistent with his proceeding against this background.

Again I make no comment as to the wisdom or otherwise of Peter Scragg & Associates’ approach. My point is that I am not persuaded that in the six months following the institution of the claim, and in instituting the claim, Peter Scragg & Associates did act in furtherance of its own interests. Consistent with this conclusion I accept that Mr Scragg did not advise Law Claims in September 2014 of the possibility of a claim against Peter Scragg & Associates because he did not consider his firm’s negligence an issue. Once it was an issue he promptly advised Law Claims. Further, consistent with Peter Scragg & Associates’ understanding, once Ms Lyons’ solicitors indicated that an extension of time would be contested, the matter was briefed to counsel and the proceedings were recast with attention being given to the time point. Further again, the settlement conference was pursued because, from Peter Scragg & Associates’ point of view, nothing had changed despite the claim being instituted out of time.
As to Mr Scragg’s conduct in revising Ms Morris’ claim for damages upward to $500,000, again his approach may be open to question, but absent a suggestion such as it being done to bring greater pressure to bear on Allianz to negotiate a settlement and thereby avoid any consequence derived from its negligence, which was not put, it does not cause me to think that at that time Peter Scragg & Associates were motivated by their own interests over and above those of Ms Morris.
I accept Mr Scragg’s evidence that he formed the opinion that Ms Morris’ loss would exceed the initial claim amount. His seeking Ms Lyons’ agreement to waive the upper jurisdictional limit in the Magistrates Court is consistent with this. So too is the offer of settlement that has been filed in the Magistrates Court. I accept that Peter Scragg & Associates were then required to plead a fresh amount. I also accept that Mr Scragg arrived at the revised figure pleaded without first taking instructions as to that figure. However, he did have instructions to increase the claim. In any event, as I have said, nothing in the evidence suggests that his actions were motivated by an attempt to manipulate an outcome designed to preserve the reputation of his firm or avoid any future liability for any claim that Ms Morris might make. No such motivation was put to Mr Scragg in cross-examination.
I do not accept the suggestion that the Fourth Amended Claim has been drawn so as to avoid or minimise the significance of Mrs Scragg’s evidence. Despite facts falling within s 48(3)(b)(ii) of the Limitations of Actions Act 1936 (SA) no longer being pleaded, the waiver argument, which is based on proving the same facts formerly pleaded in support of the s 48(3)(b)(ii) claim, remains live.
Lastly, Mr Scragg conceded that post 10 March 2015 he did state to Ms Lyons’ solicitors that he would not broach any reduction in an amount offered in settlement to reflect litigation risk. Had an offer been made, however, including a reduction for litigation risk, he said he would have taken instructions on it. He described his statement as a negotiating position. The wisdom in making such statement may be questioned, however, the fact of the statement being made does not cause me to think that Mr Scragg was not purportedly acting in the interests of Ms Morris. A professed willingness to accept a discount would have been more in line with a desire to settle in order to avoid having the firm’s negligence laid bare.
Accordingly, I reject the submissions made by Ms Lyons that Mr Scragg and Peter Scragg & Associates have already acted in the conduct of Ms Morris’ claim in furtherance of their own interests. However, so concluding does not dispose of the matter. As I have indicated, I am satisfied for the reasons I have given that Mrs Scragg and Peter Scragg & Associates have an interest in the outcome of the application distinct from their interest in supporting the success of their client by the discharge of their professional skill and duties in the action. The question that then arises is whether the fair-minded, reasonably informed member of the public might conclude that the administration of justice requires that the defendants be restrained from further acting for Ms Morris in the Magistrates Court proceedings, in the interests of the protection of the integrity of the judicial process, and the due administration of justice, including the appearance of justice.
Here I bear in mind:[46]
The public interest in the administration of justice requires an unqualified perception of its fairness in the eyes of the general public … The goal is not just to protect the interests of the individual litigant but even more importantly to protect public confidence in the administration of justice.
[46] Everingham v Ontario (1992) 88 DLR (4^th) 735 at 761-2 (The Court).
And in Commissioner for Corporate Affairs v Harvey, Marks J said:[47]
What is important, however, is that the court sets its face against giving audience to legal representatives who are unable to assure the court of a singular interest. It is the purity of interest in the adversaries before the court that gives what fundamental utility and credence there is in the system.
[47] [1980] VR 669 at 762.
Once it was made plain by Allianz that the application for an extension of time would be contested, assurance of a singular interest became necessary. Bearing in mind the evidence that Mrs Scragg and anyone else from Peter Scragg & Associates can be expected to give, and the fact that the firm’s conduct of the matter is integrally identifed with the issue in dispute, in my view, a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires Peter Scragg & Associates to be restrained from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
I do not consider that the fact that an independent member of the bar has been retained as counsel for Ms Morris provides the antidote. Relying upon what fell from Parker J in Viscariello v Legal Profession Conduct Commissioner, counsel for the defendant submitted that the fair-minded, reasonable member of the public would appreciate a barrister’s obligation to act in the best interests of his client rather than simply follow their solicitor’s instructions.[48] While I agree with Parker J that such knowledge must be imputed to the fair-minded, reasonable member of the public, it does not overcome the inability on the part of Peter Scragg & Associates and Mrs Scragg to provide an assurance of singularity of interest. More particularly, counsel, despite being in a position to provide independent advice cannot provide any comfort against the apprehension that Mrs Scragg and Peter Scragg & Associates might tailor their evidence to suit their own purposes.
[48] [2015] SASC 4 at [25].
Having come to the conclusion that a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires Peter Scragg & Associates to be restrained from acting, it is necessary to consider whether I should exercise my discretion to restrain the firm pursuant to this Court’s supervisory jurisdiction. The factors to be considered are conveniently summarised by Brereton J in Kallinicos v Hunt:[49]
The inherent jurisdiction is discretionary. The cases emphasise that consideration is to be given to the prima facie right of a party to be represented by the lawyer of its choice, to the inconvenience, cost and disruption which might be occasioned by requiring a party to change lawyers, and to the “exceptional” nature of the jurisdiction.
[49] (2005) 64 NSWLR 561 at [92].
I remind myself that it is no small matter to restrain a firm of solicitors from acting for a litigant who expresses a wish to the contrary. The right that a litigant has to choose for him or herself the legal practitioner who will represent them in court should not lightly be overridden.
As indicated above, in her affidavit Ms Morris states that she is aware that her claim was instituted eight days out of time and expresses the wish that Peter Scragg & Associates continue to act on her behalf. As also indicated above, I received Ms Morris’ affidavit despite Ms Morris not being presented for cross-examination. In Re O’Neil (deceased) Anderson J of the Supreme Court of Victoria said:[50]
In cases where affidavits are challenged … and the deponent is not available for cross-examination, the affidavit may either be rejected, or, if it is received, only slight weight may be given to its contents. In Shea v. Green (1886), 2 T.L.R. 533, the court refused to act upon an affidavit of a deponent who had absconded, and could not be cross-examined. Similarly, in Dunne v. English (1874), L.R. 18 Eq. 524, and Bingley v. Marshall (1862), 6 L.T. 682, where the deponents had left the country and were not available for cross-examination, their affidavits were not allowed to be read. In other cases where the deponents have died or have been too ill to be cross-examined, their affidavits have been admitted, though the court has intimated that the weight to be given to them would be slight: see Abadom v. Abadom (1857), 24 Beav. 243; Davies v. Otty (1865) 35 Beav. 208; Braithwaite v. Kearns (1865), 34 Beav. 202. In principle, there seems to be no difference between the non-availability of a deponent for cross-examination due to wilful absence and non-availability due to death or illness. It will depend on the particular circumstances including the nature of the proceedings whether such an affidavit will be rejected or if admitted the weight to be given to it. It appears, however, that the admission of an affidavit which cannot be tested by cross-examination is a matter of determination by the court.
[50] [1972] VR 327 at 333 (Anderson J).
And in In the Estate of Constantine (deceased) Mayo J said:[51]
In so far as there are disputed issues, testimony in relation thereto can not be relied on, which is not tested by cross-examination, or in respect whereof opposing counsel have not opportunity to cross-examine of which they are satisfied not to avail themselves. The fundamental principle underlying the necessity for cross-examination is that even an honest witness, if examined only on behalf of the party for whom he is called, may disclose no more than a part of the information which is relevant. There may be other circumstances which amplify or qualify his testimony, and there may also be matters that will diminish the trustworthiness of his powers of observation, or of his memory; he may be biassed or prejudiced. The effort to discover the truth of observed facts, where testimony is in conflict, rests in the last resort upon the demeanour and the answers of the witness during his examination by the opposing party, or counsel for that party. His means of knowledge, his capacity to use his senses in observing incidents and events, his ability to discriminate between the important and the trivial, his power to differentiate between facts that have impinged upon his sensory equipment, and inferences and rationalization by which his mental processes have tended to complete the picture may be ascertained. Finally, the integrity of the witness may be enquired into and matters of prejudice or bias brought to light, or a tendency or inclination to give a false account exposed. In Allen v. Allen, Lopes L.J. for the Court of Appeal said:-“It appears to us contrary to all rules of evidence, and opposed to natural justice, that the evidence of one party should be received as evidence against another party, without the latter having an opportunity of testing its truthfulness by cross-examination.” That criticism applies to any witness who is testifying as to material facts and not merely to the formal or unimportant: see also Napier C.J. in Dayman v. Simpson. The general rule is that no testimony is proper to be considered as against the interests of a party unless that party has had an opportunity of submitting the deponent to the test of cross-examinaion, although there are circumstances that may be treated as exceptions: see Poole J. in In re John O'Brien: Ex parte Allchurch. A story may be so incredible, or so obviously fiction, as to require no exposure. But as a general rule if a court is to be asked to disbelieve a witness, that witness should be subjected to cross-examination: R. v. Hart.
[Footnotes omitted.]
[51] [1947] SASR 415 at 424-5.
Counsel for Ms Lyons submitted that, in line with Re O’Neil (deceased) and In the Estate of Constantine (deceased), Ms Morris’ affidavit should be afforded very little weight.
I accept that Ms Morris is aware that her claim was instituted eight days out of time and, nonetheless, wishes Peter Scragg & Associates to continue acting for her. Counsel for Ms Lyons submitted that I could not be satisfied in the absence of seeing and hearing from Ms Morris that her consent to Peter Scragg & Associates continuing to act on her behalf was fully informed. I understand that submission to mean that I cannot accept that Ms Morris has necessarily had explained to her in detail, and more importantly, understood, all risks attendant upon her continuing with the proceedings in the Magistrates Court, and continuing with Peter Scragg & Associates as her solicitors, and all options available to her, including her right to discontinue the Magistrates Court proceedings and pursue a claim against her solicitors. I agree with that submission. Neither Ms Morris’ affidavit nor Mr Scragg’s evidence provides me with any detail of the content of conversations that have been had and the advice given, by whom and when. I am also conscious, in the words of Mayo J, that there may be other circumstances that may “amplify or qualify” that to which Ms Morris has deposed. That said, I do accept that Ms Morris has been informed that she is at liberty to retain the services of different solicitors, that the success of her application for an extension of time cannot be assured, that she may have a claim against Peter Scragg & Associates in the event that her application fails, and that she has faith in counsel. With the exception of the last fact, either in his affidavit or in cross-examination Mr Scragg gave evidence that each of these issues had been raised with Ms Morris. On none of these issues was the contrary put to him and no reason arises to reject his evidence. To be clear, I accept the issues identified were raised with Ms Morris, and I accept she has expressed the wish to which I have already referred. However, in the absence of hearing from Ms Morris I am not prepared to accept that her consent and desire is the product of being fully informed as to her predicament, her rights and options and fully understanding her predicament, her rights and options.
I am also mindful that this Court should approach applications such as this with a degree of circumspection. In this regard, the United States Court of Appeals said: [52]
We do not mean to infer that motions to disqualify counsel may not be legitimate, for there are obviously situations where they are both legitimate and necessary; nonetheless, such motions should be viewed with extreme caution for they can be misused as techniques of harassment.
[52] Freeman v Chicago Musical Instrument Co 689 F2d 715 (1982) at 722.
I do not suggest, and neither did the defendants, that this application has been instituted in order to harass. However, the cautionary words of the Court of Appeals serve to highlight that such applications are the exception and that the fair minded reasonably informed member of the public will appreciate what is the norm and why a court should be slow to depart from it.
I am also cognisant of the fact that the trial in the Magistrates Court is listed to resume on 24 October 2016. This means that, if the trial date is to be kept, Ms Morris will only have approximately three weeks to find and instruct new solicitors. I see no reason why the independent counsel who is already briefed could not be retained, considering the fact that he has already opened Ms Morris’ case. On the pleadings as they stand, the trial will not be overly complex. It has been listed for five days. There is no dispute as to liability and while there are complicated factual matters on the issue of damages, there does not appear to be any complex legal contentions. In my view the time available is sufficient to instruct fresh solicitors and, bearing in mind that they will have the assistance of counsel, sufficient time for those solicitors to read in and capably represent Ms Morris. In this regard, it may also be accepted that much if not all of the necessary preparatory work has been done by Peter Scragg & Associates.
I accept that additional cost will be occasioned by a change of solicitors and that some costs already incurred will be thrown away. The evidence does not allow me to conclude what the likely amounts may be. Mr Scragg advised that costs incurred from 10 September 2015 up to the first day of trial amounted to a little over $40,000. That sum must be discounted to reflect the portion of work occasioned by Peter Scragg & Associates’ negligence. And then, as indicated, a portion will be thrown away as fresh solicitors read-in. The incursion of additional costs and costs thrown away is unfortunate, however, I do not think it outweighs the public interest in the maintenance of the integrity of the administration of justice.
I accept that Ms Lyons’ solicitors did not give notice of Ms Lyons’ intention to apply for Peter Scragg & Associates to be restrained from acting until 2 May 2016. Thereafter it cannot be said that they delayed in pursuing such relief. It is unfortunate that the application was made so late in the piece. However, I accept that until solicitor error was pleaded in support of the application for an extension of time, the basis for such application was not known.
I recognise that Ms Morris has an interest in these proceedings being resolved as quickly as possible. However, in my view, any disruption or inconvenience to Ms Morris is outweighed by the public interest in the maintenance of confidence in the administration of justice. In my view, the conduct of Peter Scragg & Associates is so integrally identified with the issues subject of the application of an extension of time that it is appropriate to exercise the discretion to restrain the defendants from acting for Ms Morris.
Conclusion and orders
For the reasons given above, I order that the first and third defendants, and any legal practitioner employed by them or acting as agent for them, be restrained from acting for Kathy Morris (nee Butcher) in Action No. AMCCI-14-3641 in the Magistrates Court of South Australia.
I will hear the parties as to the costs of the application.