Miles v Corser & Corser (A Firm)
[2004] WASC 97
MILES -v- CORSER & CORSER (A FIRM) [2004] WASC 97
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 97 | |
| Case No: | PRO:4700/1997 | 23 MARCH 2004 | |
| Coram: | SIMMONDS J | 18/05/04 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Injunction granted | ||
| B | |||
| PDF Version |
| Parties: | VALERIE ANNIE MILES CORSER & CORSER (A FIRM) |
Catchwords: | Equity Injunctive relief Legal practitioners Conflict of interest Turns on own facts Practice and procedure Solicitors on the record Application in chambers Costs Indemnity costs |
Legislation: | Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6(1) Non-Contentious Probate Rules 1967 (WA), r 37(9) Rules of the Supreme Court 1971 (WA), O 8, O 59 r 9, O 73 |
Case References: | Miles v Hughes, unreported; SCt of WA (Parker J); Library No 99009; 15 January 1999 Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226 Clay v Karlson (1997) 17 WAR 493 Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Gava v Grljusich, unreported; FCt SCt of WA; Library No 970492; 18 September 1997 Jovetic v Stoddart & Co (1992) 7 WAR 208 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant (Objecting Party)
AND
CORSER & CORSER (A FIRM)
Respondent (Solicitor for Executor)
Catchwords:
Equity - Injunctive relief - Legal practitioners - Conflict of interest - Turns on own facts
Practice and procedure - Solicitors on the record - Application in chambers - Costs - Indemnity costs
Legislation:
Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6(1)
Non-Contentious Probate Rules 1967 (WA), r 37(9)
Rules of the Supreme Court 1971 (WA), O 8, O 59 r 9, O 73
(Page 2)
Result:
Injunction granted
Category: B
Representation:
Counsel:
Applicant (Objecting Party) : Mrs P M Edward
Respondent (Solicitor for Executor) : Mr R W Bower
Solicitors:
Applicant (Objecting Party) : Verschuer Edward
Respondent (Solicitor for Executor) : Corser & Corser
Case(s) referred to in judgment(s):
Miles v Hughes, unreported; SCt of WA (Parker J); Library No 99009; 15 January 1999
Case(s) also cited:
Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226
Clay v Karlson (1997) 17 WAR 493
Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Gava v Grljusich, unreported; FCt SCt of WA; Library No 970492; 18 September 1997
Jovetic v Stoddart & Co (1992) 7 WAR 208
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1 SIMMONDS J: This is a chamber summons pursuant to O 73 r 21 of the Rules of the Supreme Court1971 (WA) ("RSC"). It arises out of Probate action 4700/97 for the propounding in common form of the Will of Mary Monica Urquhart dated 21 October 1992. That will was varied by a codicil dated 22 October 1996. Probate had been granted to Mr Patrick David Mostyn Hughes, then partner in the firm Corsers, barristers and solicitors, as executor of the Will. The respondent, a firm of barristers and solicitors, is a descendant of Corsers, with two of its partners, Mr Kavenagh and Mr Bower, having been members of the earlier firm, together with Mr Hughes and with others.
2 The application in its original form was for an order to restrain Corser & Corser from acting as solicitors for the executor Mr Hughes in the passing of his accounts relating to Mrs Urquhart's estate.
3 This matter first came before me in Chambers on 27 February 2004, where it was adjourned to a special appointment, with costs reserved, and an undertaking from Mr Bower, appearing for the respondents, that the firm was not and would not be acting for the executor. This undertaking was subject to a qualification to which I will return.
4 The applicant's position in relation to the estate of the late Mrs Urquhart arises most directly out of a Deed of Settlement dated 11 June 1999 between Mr Hughes as executor of the estates of the applicant's father, Stanley Ernest Urquhart, and mother, Mary Urquhart, as well as Mr Hughes and Mr Julian Wright, as trustees of certain trusts, and also The Little Sisters of the Poor WA (Inc) ("the Little Sisters"), and The Society for the Propagation of the Faith ("the Society"). In addition, the Deed refers to other beneficiaries not parties to it. The Deed of Settlement recited proceedings instituted in this Court by the applicant in respect of the testamentary affairs of each of her father and mother with effect that, if those claims were upheld, at her death Mrs Urquhart was holding the whole of her estate and the trustees were holding all of the assets on trust for the claimant. There was also an alternative claim by the applicant as against the executor of the estate of Mrs Urquhart for an entitlement to have proper provision made for her out of the estate of Mr Urquhart pursuant to s 6(1) of the Inheritance (Family and Dependants Provision) Act 1972 (WA). The Deed of Settlement recited that the "claimant's claim" had been agreed by the parties to be settled on the basis set out in the Deed. The operative effect of the Deed appeared to be that certain sums would be paid to the Little Sisters and to the Society, upon which they would assign the balance of their interests in both the estate of Mrs Urquhart and the trust to the applicant; and the applicant
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- would discontinue certain proceedings, including CIV 1438 of 1998 which was for revocation of probate of the most recent Will of her father as well as for a declaration as to his testamentary capacity.
5 One further item of context needs to be added to understand these proceedings. In action CIV 1430 of 1998 by the applicant against Mr Hughes as executor of Mr Urquhart's 1986 Will, the applicant applied for an order restraining the firm then known as Corser & Corser from acting in CIV 1438 of 1998. By order dated 12 November 1998 Parker J made the following order:
"1. Messrs Corser & Corser is hereby restrained from acting for the defendant and should remove themselves from the record.
2. The defendant pay the applicant's costs of this application to be taxed."
6 I shall have occasion later to review the principally relevant reasons of his Honour for that order. It is only necessary to add that the relevant costs were indeed subsequently taxed.
7 It is common ground between the parties that, at least as at 19 January 2004, the date of a letter from Corser & Corser to solicitors for the applicant, that firm, including Mr Bower and Mr Kavenagh, as well as a third member (Mr Hughes having retired from the firm some time earlier), acted for Mr Hughes in relation to the passing of accounts. This is consistent with the papers on the file for P 4700/97, which includes a letter from Mr Hughes to Registrar C Boyle dated 6 May 2003 on the letterhead of Corsers, barristers and solicitors, indicating that Corsers "is now acting in this matter". There is also a letter from the associate to Registrar C Boyle dated 13 January 2004 to the solicitors for the applicant, copied to Mr Kavenagh at Corsers, confirming directions made in an appointment before Registrar C Boyle on 12 January 2004 for directions in the passing of the accounts. The directions included that the objecting party lodge and serve submissions and list of authorities, the executor lodge and serve submissions, practitioners for both parties confer as soon as practical to prepare if possible an agreed chronology of relevant events to be lodged by 30 January 2004 and the passing of accounts to be adjourned to 9 February 2004. It is my understanding that Corser & Corser did not appear for Mr Hughes at that 9 February hearing, in circumstances to be explained below.
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8 The last features of the factual context that I need to add concern further correspondence subsequent to the fax letter of 19 January 2004. This correspondence consisted of two letters. One is from the solicitors for the applicant to Corser & Corser dated 21 January 2004 which says in material part at page 2 thereof:
"With respect, it appears to me that you may not have addressed your mind to the fact that the conflict of interest to which my client objects has not in any way been diminished by Mr Hughes no longer being a member of your firm. The conflict to which my client objects is that which is been spelled out by Justice Parker in the final paragraphs of his Reasons for Decision.
I confirm that I am instructed to apply for an order restraining your firm from acting for Mr Hughes in this matter unless your undertaking to withdraw is received in my offices before close of business on 22 January 2004."
9 The last item of correspondence appears to be of particular significance to this matter is a letter dated 30 January 2004 from Corser & Corser to Verschuer Edward, solicitors for the applicant, which was produced at the hearing by Mr Bower. That letter indicates that Corser & Corser appear to have had a change of heart on the matter of representation of the executor. That letter was understood by solicitors for the applicant as indicating Corser & Corser were no longer acting for Mr Hughes, an understanding which is confirmed by a letter from them to Mr Hughes also dated 30 January 2004. The letter to Verschuer Edward in material part reads:
"Without any admission that we should not act for Mr Hughes on the passing of accounts, we advise that we will not represent him in the passing of accounts."
10 The submissions of counsel for the applicant, Mrs Edward, in support of the application for an injunction fall into three categories. The first category has to do with the Court's jurisdiction to make the order; the second category has to do with the absence of a memorandum of conferral under O 59 r 9(1) RSC; and the third category has to do with the merits of the application itself. Mr Bower adopted this scheme of organisation in his reply and I also follow that scheme.
11 With respect to the Court's jurisdiction to entertain the application, there was some argument at the hearing directed at Mrs Edward's
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- submission that notwithstanding P 4700/97 had begun as a proceeding outside O 73 r 1 RSC as an action which is "non-contentious", the action had developed into a contentious one. That was because the matter of the passing of accounts had led to an objection to the passing by the party; the party and the executor seeking to have accounts passed were both represented by counsel in formal proceedings before a Registrar; the parties had been required to provide detailed submissions as to the matters in issue in that set of formal proceedings; that those proceedings had been and would continue to be recorded for transcript purposes; and that the Registrar had a discretion to award costs under r 37(9) Non-Contentious Probate Rules 1967 (WA). This overcame any difficulty that might otherwise have been had by subsuming this application under O 73 r 21 of the RSC.
12 Further, the bringing of the application as a chamber summons was competent notwithstanding that the matter did not fall within the list of matters specifically enumerated in O 59 r 1, RSC, in view of the discretion of the Judge under O 59 r 1(15) as to what matters may be disposed of in Chambers.
13 Mrs Edward made reference to the loose-leaf service, Hockley, Macmillan and Curthoys, Wills Probate and Administration Service Western Australia, par 5405.1, where it is said:
"Despite the mandatory wording of this rule [r 37(1) of the Non-Contentious Probate Rules 1967 (WA)] and s 44 of the Administration Act 1903 … it has never been the practice in Western Australia for personal representatives to pass accounts, unless called on by the court to do so. The court calls for accounts where a beneficiary requests the passing of accounts or where the passing of accounts is a prerequisite to the personal representative applying for commission under s 98 of the Trustees Act 1962."
14 This, it was said, bolstered the submission that the passing of accounts could become a contentious matter depending on factors of the sort Mrs Edward had enumerated and to which I have referred previously.
15 Mrs Edward also referred to the definition of contentious business in Osborn, P G, Osborn's Concise Law Dictionary, 6th ed, London Sweet & Maxwell, 1976 at p 92. That definition reads:
"Probate proceedings in which there are contending parties, such as proving a will in solemn form, or revoking a grant of
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- probate, as opposed to common form proceedings where there is no contest."
16 Mr Bower's argument by way of reply was that P 4700/97 and the passing of accounts under it remained "non-contentious" business for the purposes of the Rules of the Supreme Court; and that the disposition of the application by way of chamber summons was not possible under O 59 r 1. The respondent not being a party to the non-contentious business, the chamber summons could not in any event be directed to the firm.
17 The matter of whether or not the passing of accounts in P 4700/97 was contentious business is also relevant to the merits of the application, and I return to it below. In the event, it is not necessary to determine the issue at this point, as there is a simpler answer to Mr Bower's objection on jurisdictional grounds to the application. That answer lies in the inherent power of the Court, as it is put in Seaman, Civil Procedure in Western Australia, par [34.0.5], "To control and deal with members of the legal profession and to ensure that the administration of justice is not brought into disrepute". That paragraph of the text goes on to refer to the approach that has been adopted in relation to preventing a practitioner from appearing for a party in proceedings before it. Mr Bower appeared to concede that this power was sufficient for the purposes of giving the Court jurisdiction to make an order. The matter whether or not an order should be made is, of course, a different one.
18 As to the matter of the lack of a memorandum of conferral for the purposes of O 59 r 9, Mrs Edward conceded that no such memorandum had been lodged, but referred to the power of the Court to waive the operation of O 59 r 9(1) for good reason. By reference to Seaman, par [59.9.1], Mrs Edward submitted that there was an affidavit in support of the application to restrain solicitors from acting that set out in detail, supported by correspondence, the endeavours of the parties to resolve the issues giving rise to the application. It was submitted that sufficient reason was shown to permit the Court to waive the operation of the Rule.
19 Mr Bower's reply on this point was that as no memorandum of conferral had been lodged no order could be made on the chamber summons.
20 On this point, as I signalled at the hearing itself, I determined the matter against the respondent. I note from the text at par [59.9.2] that:
"If the applicant is given adequate notice of the nature and grounds of the proposed application an opposing party's failure
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- to respond would be good grounds for waiving the requirement and in a proper case for the making of a costs order against the opposing party."
21 Whether or not such notice was given here, or the opposing party failed to respond within the meaning in both cases of that quotation is, of course, a different matter. Previously, I referred to some of the correspondence in this matter. I refer in particular, as did Mrs Edward at the hearing although in a different context, to the letter from the applicant's solicitors to the respondents dated 21 January 2004 being annexure "H" to the affidavit of Valerie Annie Miles sworn 28 January 2004. The third and the second-last paragraphs of that letter had not been replied to by the time the applicant filed its application, which was on 29 January 2004, some time after the time stipulated for reply, if not a substantial time after that date. However, the letter I referred to occurred in a chain of correspondence in which the position of the applicant in relation to the subject matter of this application had been strongly expressed. In those circumstances, even a relatively short delay in response risked the commencement of proceedings, of the sort that occurred here.
22 There is a related matter, however. It is that the applicant persevered in these proceedings notwithstanding that it received the reply sent by the respondent to the applicant and which appeared to cross, as it were, with the filing of the application in this matter. I return to that point in the next part of these reasons.
23 As to the matter of merits of the application, Mrs Edward submitted that the fact of the respondent's reply to the applicant's solicitors' letter that I have previously referred to, that of 30 January 2004, together with the representations at the earlier hearing of this chamber summons before me, that the firm had no intention of accepting instructions from the executor in the passing of accounts, and that the executor had no intention of issuing such instructions, as well as the undertaking that the respondent would not change its position by accepting instructions in the future (given from the bar table at the hearing referred to), had to be set against the fact of the lateness of those responses. This was in addition to the fact that on all the material available to the applicant the respondent continued to be shown as solicitors "of record", as it was put, for the executor in the matter of the passing of accounts, that no reference to other legal representatives had appeared on the file so far as the applicant was aware of it, that the particular representative referred to as having been retained by the executor in place of the respondent was, in any event, a barrister
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- whose name could not appear as solicitor for the executor, and that the respondent continued to oppose the application being sought.
24 Mrs Edward also referred to the decision of Parker J in Miles v Hughes, unreported; SCt of WA (Parker J); Library No 99009; 15 January 1999, to which I have previously made reference. That order, as I have indicated, was one restraining Corser & Corser, as that firm then was, from acting further in that matter, which was of revocation of a grant of probate. The basis for that order, Mrs Edward indicated, was the conflict found by his Honour between the firm's interest in protecting their profit costs and their duty to the Court. Mrs Edward further indicated that among the accounts sought to be passed was an account for legal costs incurred by the respondent firm as it then was in unsuccessfully defending an application for them to be restrained (presumably the application on which Parker J's order was made), an account which the then firm by their then partner, Mr Hughes, the executor in this case, paid to themselves, it was said, from moneys held in trust by them, This was notwithstanding, it was submitted, that the order of the Court had been that Mr Hughes pay those costs himself. Mrs Edward submitted that it was a foreseeable consequence of the passing of the accounts that the partners in the respondent firm at the relevant time would be required to repay to the applicant moneys which they have received for acting in, among other things, CIV 1438 of 1998, together with all other moneys that might be found to consist of excessive charges, on the grounds that these were moneys had and received to which they were not entitled. Mrs Edward further submitted that it was not open to those solicitors to raise as a defence that the moneys had been paid by Mr Hughes as executor under a mistake of law as that defence was only available where the moneys were paid by a person in such a position with the authority of the cestui que trust. Mrs Edward further submitted that the only interest of the respondent firm of solicitors in the passing of accounts in this matter was their interest in protecting the profit costs of the partners in the firm "at the relevant time", two of whom, namely Mr Kavenagh and Mr Bower, remained partners of the respondent at the time of the application. Relatedly, the applicant referred to the foreseeable liability of the members of the firm, who would be liable to repay to the applicant such moneys as were found to be excessive charges or to have been paid by mistake.
25 Mrs Edward further submitted that the respondent had not adduced any evidence of any benefit to the Court or to the executor himself from their remaining solicitors of record in relation to the proper and lawful discharge of the executor's duties in that role. Mrs Edward referred to the
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- respondent's indications that the executor had no intention of instructing them.
26 Mrs Edward further submitted that this was an appropriate case for the Court to consider an award of solicitor/client "indemnity costs" as the matter might be seen to have been continued through the resistance of the respondent in circumstances where they should have known that they had no chance of success if properly advised, circumstances from which it might be presumed that the stance taken was for some ulterior motive or because of some wilful disregard of known facts or clearly established law.
27 Mr Bower, by way of reply in his submissions, reiterated that the respondent no longer acted for the executor in relation to the passing of accounts; that the executor was no longer in partnership in the respondent, and that only two members of the firm who had been in partnership with the executor were now members of the current Corser & Corser, namely, Mr Kavenagh and himself. Mr Bower further submitted that on the passing of accounts, the issues concerned whether or not these were allowable expenditures by the executor, not whether the respondent had been overpaid. Mr Bower further submitted that there was a written retainer agreement in this case and that accounts had been submitted to the executor pursuant to it and the accounts paid under the authority of the executor.
28 Finally, if the Registrar, in passing the executor's accounts, determined that the executor had not made proper expenditures on those accounts, the executor was not in a position to ask the recipients to repay payments made voluntarily. Mr Bower submitted that it followed from this that the two members of the respondent originally in partnership had no pecuniary interest in the outcome of the passing of accounts.
29 During the course of the hearing, it became evident that there was some difficulty determining the steps in the evolution of what is now Corser & Corser, the firm. This, in part, came about because of changes in the name of the firm between the date of Parker J's order and the present day. Mr Bower attempted to construct that sequence for the Court. It may be useful for me to set it out as he presented it.
30 The firm was called Corser & Corser over the period that included November 1998 and ended in late January or early February 1999. Its partners over that period were Mr Bower, Mr Kavenagh and Mr Hughes, as well as some additional partners. At the end date indicated, the
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- partnership was dissolved and entered into winding-up process. The successor firm took the name "Corsers". Partners in this firm were Mr Hughes, Mr Kavenagh, Mr Bower and a further partner. On or about 30 June 2003, this partnership was dissolved and wound up, with the departure of the fourth person to whom I have referred. Commencing almost immediately thereafter, a new partnership, comprising Mr Hughes, Mr Kavenagh and Mr Bower, began to operate, initially under the name "Corsers" until the retiring partner took issue with that name, when it was changed to "BHK Legal", the letters corresponding, of course, to the names of the partners. Finally, in or about December of 2003, Mr Hughes left to join a firm, O'Connor Partners. Almost immediately thereafter, Mr Kavenagh, Mr Bower and a third person began to operate under the name "Corser & Corser", which is the respondent in these proceedings.
31 In the event, the sequencing of the names of the firm is less significant than the matter of those persons who acted as solicitors for Mr Hughes as executor of the estate here. As Mrs Edward's submissions indicate, they are the persons whom the applicant seeks to restrain. The remaining significance of the current firm name is for liability to pay costs of the application in Mrs Edward's submission, as well as, as will be seen, the applicant's modified minute of amended order requirement that the respondent take all necessary steps to remove itself from the record on the passing of the accounts in the estate here.
32 As the hearing developed, I suggested to the parties that the form of the order requested by the applicant did not reflect that position. I invited Mrs Edward to prepare a minute of proposed orders amending those previously sought. The original minute was in terms:
"1. Messrs Corser & Corser be restrained from acting as solicitors for the executor of the Will of the late Mary Monica Urquhart in the matter of the passing of his accounts relating to her estate.
2. Messrs Corser & Corser pay the objecting party's costs of this application to be taxed and paid forthwith."
33 At the end of the hearing, the applicant produced an amended minute of proposed orders as follows:
"1 The members of the respondent and its predecessors and successors in title who have at any time acted for Patrick David Mostyn Hughes as executor of the estate of the late Mary Monica Urquhart be restrained from acting for him
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- by themselves or by their servants or agents in the matter of the passing of accounts relating to her estate.
- 2. The respondent pay the costs of this application on an indemnity basis to be taxed if not agreed.
3. The respondent forthwith take all necessary steps to remove themselves from the record on the passing of the accounts in the estate of Mary Monica Urquhart."
34 I believe that this is a rather more accurate version of the relief Mrs Edward's sought than the minute of proposed order in the original form. However, there is one difficulty with it. As I have previously indicated, the jurisdiction of the Court here relates to its inherent powers to control practitioners. While I accept that all of the current members of Corser & Corser are effectually before the Court, it is not possible, it seems to me, to say that members of the "predecessors" or "successors" of the firm, not members of the current firm, are so placed. I do not believe it would be appropriate, even if I were otherwise moved to make the orders sought, to make orders against those other persons without giving them an opportunity to be heard.
35 To return to the matter of the merits of the application, I should mention one other matter before going further into those merits. It is that Mr Bower's outline of submissions refers to Corser & Corser as "respondent (solicitor for the executor)", and is dated 26 February 2004. Further, in an affidavit filed on 22 March 2004 and sworn on that date by Mr Bower opposing the application for the order, Corser & Corser is referred to in the same way. I take both of these documents, and in particular the latter, as simply using the style of reference to the respondent employed in the original chambers application, and not taking a position, one way or the other, on the matter of for whom the respondent was acting. In the event, it was clear from the hearing that the respondent was representing itself. The respondent maintained both throughout the original hearing of the matter and this hearing that it had ceased to act for the executor, and there was nothing that emerged at the hearing that should cause me to seriously doubt that was the case.
36 There was some question at the hearing of the appropriate test to be applied by the Court in considering the merits of the application. Reference was made to the authorities on interlocutory injunctions. A convenient summary of the principles in question appear in the chapter "The Interlocutory Injunction" by Owen J in Carroll, R (ed) Civil
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- Remedies: Issues and Developments, Federation Press, Leichhardt, 1996 at 249 - 250. There, his Honour extra-curially lists the factors said to be relevant to the grant of an interlocutory injunction in terms of the following:
"(1) The applicant must first satisfy the court that there is a serious question to be tried.
(2) Even if there is a serious question to be tried the court does not grant an injunction if common law damages would be an adequate remedy.
(3) If there is a serious question to be tried and damages would not be an adequate remedy, the court then considers whether the balance of convenience lies in favour of granting or refusing the relief sought.
(4) When considering the balance of convenience it is appropriate for the court to take into account relative strengths and weaknesses of the applicant's case.
(5) At the hearing the court should not attempt to decide factual conflicts that arise in the affidavit material nor should it determine difficult issues of law which require detailed argument."
38 It does not seem to me, in light of the nature of the application, that the test referred to by Mr Bower is the one that should govern. This application is concerned not with preserving the status quo between competing parties pending final resolution of the matters in issue, but the protection of the interests of justice. I have already referred to the inherent power of the Court to control and deal with members of the legal profession. From the material in Seaman par [34.0.5], also referred to in Mrs Edward's outline of submissions, it is that interest which the grant of an injunction in a case like this would serve. I note this also appeared to be the basis upon which the order of Parker J in 1998 restraining the then firm of Corser & Corser from acting for the executor was made. As his Honour indicated in the judgment at 6, "The interests of justice are both the reason why this power will be exercised and the criterion for
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- determining whether the circumstances of the particular case justify its exercise". While this may well draw into consideration the matters covered by two and five in the list from those relevant to an interlocutory injunction referred to in the quotation from the article by Owen J, they are being applied for the purpose of a permanent injunction to vindicate the interests to which I have referred.
39 In applying this approach, I find further assistance in the later passage from Parker J's judgment (at 6), where he says:
"At the heart of the matter is the desirability of avoiding any suggestion of real or apparent conflict between the duty owed by a practitioner to the Court and the obligation of the practitioner to the client or to the self-interest of the practitioner."
40 In applying this test, Parker J listed considerations put to him, and those upon which he found his order, as follows (at 8):
"The potential financial interest of the firm in the outcome of the action is put on two bases. First, there are the profit costs which the firm has apparently charged in respect of the defendant's administration of the estate pursuant to the grant. Secondly, there is a much more significant risk, indeed it would appear a quite substantial one in terms of quantum, whether the defendant and the firm or either of them would be obliged to restore the status quo in the estate in the event that the grant of probate is revoked.
In my view this last consideration provides a determinative reason why the firm should not continue to act in this action. It gives rise to the potential for a direct and significant conflict of interest with the firm's obligations to the court. The firm's potential liability with respect to its profit costs and the potential for practitioners of the firm to be called as witnesses also make it undesirable that the firm should continue to act."
41 I should add that I also note, in a passage from Seaman par [34.0.5] not referred to by his Honour, the test, associated, it would appear, with the matter of whether there was "a real need for an order preventing a solicitor or counsel from acting to imperil the administration of justice and to protect the integrity of the judicial process". The learned author says:
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- "The matter will be viewed from the perspective of a fair-minded, reasonably well-informed, disinterested bystander."
42 In this case, such a bystander would take account of the fact that the action here is not the same as the one in Miles v Hughes (supra), the subject of Parker J's judgment referred to, although there are obvious factual connections between the proceedings in the current main probate action P 4700/97, and some accounts from CIV 1438 of 1998, including ones having to do with opposition to the orders made by Parker J which, as I have earlier said, are, apparently, in issue in the passing of accounts proceedings.
43 Further, such a bystander would recognise that the executor is no longer a member of the firm against which the injunction and other relief is being sought, although two of his former partners make up the majority of the respondent.
44 Further, I need to mention as a consideration the bystander referred to might properly take account of the fact that Mr Bower's affidavit opposing the application sworn 22 March 2004 previously referred to takes issue with par 15 of the applicant's outline of submissions, a matter with respect to which Mrs Edward took considerable exception at the hearing. The exception was part of a larger submission that I should reject the affidavit of Mr Bower as containing matter that was irrelevant to the proceedings, as it went not to the order for the injunction, but to matter in previous proceedings, in particular. It was also submitted that such matter included material that made inappropriate assertions about the knowledge of the applicant and her solicitor.
45 In the event, I ruled that the affidavit should be allowed to remain, as it annexed a considerable amount of material that does appear to me to be relevant, as I will shortly indicate. I make reference in the present context, however, to par 6 of Mr Bower's affidavit, in which he indicates that he had been informed by Mr Hughes that the references in the applicant's outline of submissions par 15 to Mr Urquhart having been "a patient in a locked ward of a psychiatric hospital". Mr Bower quite appropriately conceded that this might have been a misreading of par 15, which uses the quoted words in a description of the "ground" on which Miles v Hughes (supra) had been brought. Mr Bower indicated at the hearing that the paragraph in his affidavit that I have referred to was included out of a concern that the reference in the applicant's outline of submissions not be left uncorrected in view of the longstanding difference
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- of view on the matter referred to between the parties, and Mr Bower's long relationship with Mr Hughes as a past partner of his. I have considered whether this material might tend to show a risk that the respondent, through Mr Bower or otherwise, might find itself again changing its position on the representation issue. In the final analysis, I have concluded that any inference to be drawn from it of that sort is only a slight one, at best.
46 In the event, I put this paragraph to one side in my deliberations. I also put to one side the succeeding paragraph of Mr Bower's affidavit referred to, par 7, in which he says:
"The solicitors firm Corsers did not act for Mr Hughes in legal work connected with CIV 1438 of 1998 after the imposition of the restraint referred to in that paragraph of the applicant's outline of submissions, despite the assertion in the outline to the effect that it did. I am informed by Mr Hughes and on that basis believe that the applicant and her solicitor know that fact from their involvement in the history of these matters and from the relevant facts being thoroughly canvassed in the passing of accounts. Further, the applicant and her solicitor know that Messrs David Rawlinson (solicitor) and Messrs Kott Gunning (solicitors) were engaged by Mr Hughes after the imposition of the restraint precluded Corsers from acting further."
47 There was, of course, a significant dispute between the parties about whether the firm "Corsers" did, in fact, act for Mr Hughes "in legal work connected with action CIV 1438 of 1998" in the passing of accounts proceedings in respect of the matter to which I have specifically referred above. This concerned the account for the cost of resisting the application that resulted in Parker J's order. Again, I do not think that any inference that the respondent was likely to change its position again on representing Mr Hughes is an inference that can easily be drawn from this material.
48 Finally, I note the annexure, "RWB5", to Mr Bower's affidavit referred to which consists of the legal advice from Mr David Rawlinson, barrister and solicitor, to Mr Hughes, concerning whether the taxed costs of $4028.25 awarded against him as executor of Mr Urquhart's estate on the applicant's summons to restrain Corser & Corser from acting for him were "a valid expense payable by Mrs Urquhart's estate". This advice also speaks to the matter of whether the order made by Parker J was for Mr Hughes to pay the costs personally. Mrs Edward in the hearing before me took strong issue with the independence of Mr Rawlinson.
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- Mr Rawlinson, Mrs Edward submitted, was a large beneficiary for legal costs of the estate. This material, however, did not appear in any affidavits filed as part of the proceeding. Mrs Edward also took strong issue with the correctness of the advice and with the conclusions to which that advice led. This goes to matter which, in my view, is relevant, at most, to the costs order in this case on an indemnity basis, and I return to it in that connection below.
49 Mr Bower's affidavit that I have been making frequent reference to has provided me with some assistance in relation to the argument Mr Bower pressed on me that there was no place for an injunction order as he had written to the applicant's solicitors on or about 30 January 2004 advising them that Corser & Corser were no longer acting for Mr Hughes, a letter to which I have already referred, and which appears to have produced the letter from the applicant's solicitors to Mr Hughes dated 30 January 2004 confirming this. Further, I note the letter from Mr Hughes to the associate to Registrar C Boyle in the matter of P 4700/97 dated 4 February 2004 confirming that Mr Hughes had been represented by Corser & Corser at the time of the directions made by Registrar C Boyle on 12 January 2004, but that:
" … as a consequence of the objecting party's solicitor objecting to Corser & Corser continuing to act for me, on the basis of an alleged conflict of interest, and her stated intention to make an application to have Corser & Corser formally restrained from acting if they did not voluntarily cease to act, Corser & Corser ceased to act for me on 30 January 2004."
50 The letter is annexure "RWB3" Mr Bower's affidavit I have referred to. The letter goes on to say:
"From that date, I have been acting personally although I will be represented by counsel at the passing of the accounts."
51 Finally, Mr Bower's affidavit in par 10 refers to the fact that at the previous hearing of this application:
"I provided a qualified undertaking to the Court to the effect that the firm of Corser and Corser would not act for Mr Hughes in relation to the passing of Mr Hughes' accounts as executor of the estate of the late Mary Monica Urquhart."
52 The next paragraph, par 11, goes on to say:
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- "The qualification which I attached to my undertaking was that I reserved the right to submit that the application was flawed and that notwithstanding the provision of the undertaking, costs should not follow the event in favour of the Applicant."
53 Mr Bower strongly urged before me that, in the face of this material, it should not be supposed that an officer of the Court would proceed otherwise than scrupulously. I have tested that assertion by reference to the perspective of the bystander I have referred to previously.
54 In the event, I have approached the matter in terms of whether or not, if the respondent changed its mind as to representing Mr Hughes, there would be a problem of an apparent conflict of interest between the self-interest of the firm, or at least some of its members, and the duties they would owe as officers of the Court representing the executor before it. Then, it is appropriate to ask, in light of the statements of intention not to act, and the undertaking not to act I have referred to, whether there is any risk to which an injunctive order should appropriately be addressed.
55 As to the first question, it appears me that in the settlement of accounts, issues will arise as to the appropriateness of the payments made by the executor for legal services which will be significantly complicated by the relationship between the executor and the law firm concerned at the time, two partners in which would be partners in the law firm that was (hypothetically, I should add) representing him in the passing of accounts. The interests of the two partners comprising the majority of the present firm would be of the same order as if not identical at all points to those which concerned Parker J in his reasons as I have indicated them previously. Given the mutual trust and confidence on which the partnership is said to rest, there might be justifiable concern by the objective bystander for the attitude that might be taken by any other member of the firm as it is today, to the extent that attitude was relevant in evidence they gave in the proceedings. It seems to me that there is a potential question of the liability of the two partners I have referred to to restore funds to the estate that might arise as a consequence of the proceedings, a liability, which I freely acknowledge has been vigorously contested. But even without any question of such liability, the matters directly in issue in a passing of accounts going to the appropriateness of the payments made at the times when the firm consisted of Mr Hughes as a partner while, at the same time, he was acting as executor are sufficient for the injunction to be appropriate. Mr Bower pressed on me in the hearings that there was no difficulty in practice encountered where a solicitor representing a trustee was a partner of the trustees who was
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- proposing to pay the solicitor's accounts. The appropriate response to this was, it seems to me, that the circumstances changed when the matter became contentious.
56 This then takes me to the matter of whether an injunction is appropriate in light of the statements of intention and the undertaking I referred to. This issue was not before Parker J in his case. I agree that it is a relevant consideration in the exercise of my discretion. However, in this case, I do not find it determinative. I note from the history of the matter the apparent difficulty the respondent has had in appreciating the concerns of the applicant, which I find to have been consistently and clearly expressed. At the same time, as I indicate again below, the respondent might have reasonably taken the position that the matter would be significantly different if Mr Hughes left the firm. While I do not agree that that changes the position that attracts the exercise of the jurisdiction to issue an injunction in this case, it is not a position that I could conclude was unreasonably taken. Similarly, the undertaking I have referred to, qualified in the way that it was is, in my view, on further reflection on the matter, not a substitute for an injunction order. The interests of justice that underlie the Court's jurisdiction in this case make it appropriate to issue an injunctive order to put the matter beyond doubt so far as the firm is concerned.
57 This brings me to the matter of costs. In the circumstances I have concluded that the order as to costs should be that the respondent pay those costs to be taxed and paid forthwith. I do not believe an indemnity costs order is appropriate for the reasons I indicated above in relation to whether it might be concluded that the position the respondent took on the original application in relation to the departure of Mr Hughes from the firm, as well as the sufficiency of its statement of intention and subsequently its undertaking with respect to representing Mr Hughes in the passing of accounts, was an unreasonable one. It follows that I would make the order in terms of the amended form submitted by the applicant but with the following variations: In the first order that the reference to predecessors and successors in title be deleted; that the reference to an indemnity basis for the costs in this matter be deleted also; and, for the reasons developed below, that order (3) be deleted.
58 I should add that, at the most recent hearing before me, Mr Bower indicated the respondent would be content with an order dismissing the application made against an undertaking given by him on behalf of all the members of the respondent that they would not act in the passing of the accounts with the costs to be reserved. I indicated I had a measure of
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- attraction to that solution, but Mrs Edward indicated that the applicant did not. In the event, I have concluded that the order was appropriate in the form sought in light of the circumstances I have described.
59 It follows from these reasons that I would expect that the respondent would take all necessary steps to remove themselves from the record on the passing of the accounts in the estate of Mary Monica Urquhart. I would particularly emphasise the word "necessary". It may well be that that removal has effectually occurred at this point. In this respect I would expect that the respondent would be guided by the practice in matters of this sort before a Registrar. This may require the respondent to file a notice in accordance with O 8. I refer to my previous discussion of contentious issues. However, it may be sufficient that the respondent has already communicated its intention in some other way to the Registrar and to the applicant or will shortly do so.
60 However, in light of the position taken by the respondent since 30 January 2004, communicated to the Registrar and confirmed to the applicant, it does not appear to me to be appropriate to order that the respondent take the steps referred to in par 3 of the applicant's amended minute of proposed order.
61 Mrs Edward, it will be recalled, argued before me that the matter of passing of accounts, in this case at least, was a "contentious one" that attracted all of the Rules applicable to such matters, or at least O 8.
62 I do not think it is necessary for me to determine that matter. In light of my order for an injunction, and what the respondent and Mr Hughes did on and after 30 January 2004, and the basis on which the applicant proceeded in response, no order for such filing or other action is, it seems to me, called for. No prejudice to the applicant will, in my view, occur as a result of my so declining to order. However, it follows from what I have said that that change of position by the respondent does not affect the costs order in this matter, except as I have indicated.
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