Macks v Tucker - [2007] SASC 84

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Permission to Appeal in Private)
MACKS v TUCKER & ORS
[2007] SASC 84
Judgment of The Honourable Chief Justice Doyle, The Honourable Justice Duggan and The Honourable Justice David
8 March 2007
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT
Application by the plaintiffs for permission to appeal from the decision of a single Judge to the Full Court from the refusal of the Judge to make an order for the trial of certain issues in the proceedings before the trial of other issues - Full Court will interfere with pre-trial procedural decisions only in rare circumstances - no good reason to doubt the correctness of the Judge's decision and therefore interference is not in the interests of justice.
Held: application for permission to appeal dismissed.
Supreme Court Civil Rules 2006 r 282(2), r 285(1)(b)(ii); Supreme Court Rules 1987 r 75.02, referred to.
Macks v Tucker & Ors (No 2) [2006] SASC 350, considered.

MACKS v TUCKER & ORS
[2007] SASC 84
Full Court: Doyle CJ, Duggan and David JJ

THE COURT: This is an application for permission to appeal to the Full Court. The application is made pursuant to r 285(1)(b)(ii) of the Supreme Court Civil Rules 2006.
The Judge who made the decision the subject of the proposed appeal referred the application for permission to the Full Court, pursuant to r 282(2).
The Court extends to 19 January 2007 the time for the making of the application.
The Judge had refused to order that certain issues be tried before the trial of the balance of the issues arising in an action in the Court. The power to make that order is conferred by r 75.02 of the 1987 Rules. The application for the order was made by the first and second defendants.
In the action, the plaintiffs claim that the first defendant, who is a solicitor, acted in breach of fiduciary duty or in breach of his retainer as a solicitor. The plaintiffs claim that the first defendant caused loss to the estate of the late Mr JA McGregor (“McGregor”), who died in 1990. Further or in the alternative the plaintiffs claim that in breach of his duty he made a profit for which he is accountable.
The breach of fiduciary duty, or breach of his retainer as a solicitor or breach of his duty as a solicitor as the case may be, is said to arise from the engagement of the first defendant to act as solicitor to advise the executor of the estate of McGregor or from a retainer to act for McGregor prior to his death.
The plaintiffs’ claims arise from and relate to a transaction between McGregor and the first defendant before McGregor’s death, and also from alleged dealings by the first defendant with the estate of McGregor and with property said to have been part of McGregor’s property, and therefore part of his estate after his death. The transactions are more complicated than that, and as to some of the relevant property it appears that what is alleged is that McGregor had a beneficial interest in the property. But that summary suffices for present purposes.
The plaintiffs also claim that the first defendant improperly dealt with assets of a discretionary trust in which they allege that McGregor had an interest before his death (“the Anak transactions”).
The first defendant and the second defendant (the second defendant is a family trust associated with the first defendant) assert that McGregor had no interest in the trust. They assert that McGregor was not a beneficiary of the trust. They assert that the trust did not confer on McGregor, or give rise to, an asset capable of devolving to McGregor’s personal representative, or an asset capable of forming part of the divisible property of a bankrupt estate (as McGregor’s estate is).
The first and second defendants assert that the claim arising out of the Anak transactions is a claim for breach of fiduciary duty, or arising out of a conflict of interest and duty, and they go on to argue that as McGregor had no interest in the assets of the discretionary trust, no conflict of interest or breach of fiduciary duty could have arisen, nor could any loss have been caused to his estate.
By their application to the Judge the first and second defendants sought to have the Judge determine, at the outset and before other issues were determined, a number of questions which, they argue, would determine whether McGregor was a beneficiary under the trust, or whether he had any and if so what interest in the assets of the trust, and whether any and if so what interest devolved on his personal representatives on his death, and became divisible property in his bankrupt estate.
If those issues are determined in the manner for which the first and second defendant contend, they argue that the Anak transactions need be investigated no further, because no relevant claim could then arise from the Anak transactions.
They submit that in this way a substantial issue in the ultimate trial could be disposed of at the outset and relatively briefly. They argue that any claims arising from the other transactions could be tried relatively shortly. It seems to be common ground that the trial of the claims arising from the Anak transactions would take some time, a matter of some weeks. It also seems to be common ground that the issues identified by the first and second defendants could be disposed of relatively briefly. The plaintiffs appear to argue that this would take longer, possibly about two weeks. It also seems to be common ground that dealing with the Anak transactions as a whole would take a number of weeks, somewhere between six weeks and perhaps ten weeks, based on what the Judge said in his reasons.
Accordingly, it is reasonable to say that if the questions identified by the first and second defendants were resolved in favour of those defendants, the trial might be shortened by a number of weeks, assuming that it was no longer necessary to investigate the Anak transactions.
The Judge was satisfied that the first and second defendants had identified some discrete issues that probably would have to be decided at trial. The Judge also accepted, it appears, that a decision in favour of the defendants would put an end to any claim based on the Anak transactions. So there was the possibility that the determination of the issues might substantially shorten the trial.
But the Judge was concerned about the fragmentation of the trial process if it turned out that the issues were not decided in favour of the first and second defendants. The Judge was also concerned about delay that might result if there was an appeal against the decision reached on the preliminary issues.
The Judge was rightly concerned about the question of delay, because a number of the relevant events had occurred in 1990, or not long thereafter. McGregor had died in December 1990.
What seems to have tilted the scales is the Judge’s conclusion that evidence might be lead about the Anak transactions even if the first and second defendants succeeded on the preliminary issues.
The plaintiffs argued that the first defendant had engaged in a course of conduct of which the Anak transactions merely formed one part. They argued that in all of the transactions the first defendant was motivated by a wish to recover a substantial amount of money advanced to McGregor. In their application for permission the defendants make the point that the advance was to a company and not to Mr McGregor. That may be, but presumably the plaintiffs’ case is that the first defendants motivation was to recover the relevant amount, whether it was advanced to McGregor or to a company.
According to the Judge’s reasons, the plaintiffs argued that the Anak transactions, or evidence of them, would:
… be relevant to the assessment of his motives, objectives and conduct in relation to the other transactions.
On that basis, the plaintiffs argued that evidence would be lead of the Anak transactions, whatever might be the outcome on the preliminary issues.
The Judge was satisfied that there was likely to be “at least some overlap”: Macks v Tucker & Ors (No 2) [2006] SASC 350 at 38. The Judge said at [42]:
In short, I am not satisfied that determination of the preliminary issues in a way which is adverse to the plaintiff will mean that the factual matters concerning the Anak transactions will not have to be canvassed at the trial. This undermines the submission of the Tucker defendants as to the savings of time and expense which their proposal entails.
In their application for permission the first and second defendants identify some errors or arguable errors in the Judge’s summary of the action.
Even if these points are made out, the errors do not of themselves undermine the Judge’s conclusion about the Anak transactions.
The defendants attack the Judge’s conclusion that there is a link between the Anak transactions and the other transactions, and that there would be some overlap between the Anak transactions and the other transactions.
The submissions made in the summary of argument are forceful.
The issue facing the Judge is a difficult one. In effect the Judge was asked to decide whether it was reasonably arguable or likely that evidence of the Anak transactions would be admissible at trial in proof of the claim based on the other transactions, the link apparently being based on questions of motive and, possibly, patterns of conduct.
If permission to appeal is granted, the Full Court will have to examine the same material as was before the single Judge. It will have to consider the same issues. The Full Court would be in as good a position to decide the issues as was the trial Judge, but would also have to make the same difficult forecast about the manner in which the ultimate trial would be conducted.
The Full Court will interfere with pre-trial procedural decisions only in rare circumstances. Usually it will interfere, or give permission to appeal in such a case, only if there is an issue of principle or an issue of general importance. That cannot be said to be so in the present case.
Ultimately, the Full Court, when considering a application for permission to appeal in such a case, must consider what is in the interests of justice.
If there is good reason to doubt the correctness of the pre-trial procedural decision, that might provide a basis for a grant of permission, having regard to the length of the anticipated trial.
But even then the Full Court must be mindful of the dangers of giving permission to appeal from such decisions. If permission is given too readily, that will lead to undesirable disruption (by appeals) of the pre-trial process, a process which often is more prolonged than seems desirable.
The only basis upon which permission to appeal could properly be granted in the present case is that there is good reason to doubt the correctness of the Judge’s decision, and that having regard to the prospects of an appeal succeeding, and the prospect of the trial being substantially shortened, it is in the interests of justice to give permission to appeal for the purpose of the Full Court reconsidering the issue decided by the Judge. That is, for the purpose of the Full Court reconsidering the question of whether at trial evidence of the Anak transactions is likely to be admissible even if the preliminary issues are decided in favour of the first and second defendant.
The Court’s conclusion is that permission to appeal should not be granted. While the first and second defendant have mounted a forceful attack upon the Judge’s reasons, our view is that it is inappropriate to grant permission to appeal for the purpose of the Full Court reconsidering such an issue. At the end of the day it will require the making of a forecast based on a number of assumptions, a forecast which will remain a difficult one. It is one on which minds might reasonably differ. The issue that the Judge decided is one which should be left to the single Judge, unless there are powerful reasons to intervene, and certainly a more powerful reason than a conclusion that the applicants for permission appear to have an arguable case.
It is also relevant to note that the Judge appears to have formed a firm view that this is a case on which it would be best if all issues were disposed at the one time, issues of fact and law, and issues going to liability and to quantum. This is a point that the Judge made in refusing the application by the plaintiffs for an order separating the issues of liability and compensation or damages.
For those reasons, permission to appeal is refused.