Paino v MDN Mortgages Pty Ltd - [2009] NSWSC 898

CITATION: Paino v MDN Mortgages Pty Ltd [2009] NSWSC 898

HEARING DATE(S): 24 August 2009

JUDGMENT DATE :
1 September 2009

JURISDICTION: Common Law

JUDGMENT OF: Simpson J

DECISION: (1) David Bruce Magney, solicitor, and the firm of Magney & Magney, be restrained from acting on behalf of the first defendant. (2) Parties to address on the question of costs.

CATCHWORDS: PROFESSIONS AND TRADES – lawyers – application to restrain solicitor from acting for client in which a financial interest is held – solicitor likely to be material witness – solicitor’s evidence and/or conduct likely to be scrutinised – test to be applied to restrain solicitor from acting – interests of justice – order to restrain solicitor from acting for client made

LEGISLATION CITED: Civil Procedure Act 2005
Consumer Credit (NSW) Act 1995
Consumer Credit (NSW) Code

CATEGORY: Procedural and other rulings

CASES CITED: Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561
Mitchell v Burrell [2008] NSWSC 772
Scallan v Scallan [2001] NSWSC 1078

PARTIES: Cecelia Maria Paino (Plaintiff)
MDN Mortgages Pty Ltd (First Defendant)
Sydney Lending Centre Pty Ltd (Second Defendant)
Christopher Riotto (Third Defendant)
Helen Youssef (Fourth Defendant)
Paul Scara and Joseph Trimarchi trading as Scara Trimarchi Solicitors (Fifth Defendant)
Joseph Trimarchi (Sixth Defendant)

FILE NUMBER(S): SC 20413/2007

COUNSEL: R Francois (Plaintiff)
S E Gray (First Defendant)
N/A (Second - Sixth Defendants)

SOLICITORS: S O'Connor, Legal Aid Comission of New South Wales (Plaintiff)
Magney & Magney (First Defendant)
N/A (Second - Sixth Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Simpson J

1 September 2009

20413/2007 Cecelia Maria Paino v MDN Mortgages Pty Ltd & Ors
JUDGMENT

1 HER HONOUR: By amended Notice of Motion filed on 30 July 2009, the applicant, Cecelia Maria Paino, seeks an order restraining David Bruce Magney, a solicitor, from acting on behalf of the first defendant in the substantive proceedings.

2 It is necessary to say something about the substantive proceedings. The current initiating process is an amended statement of claim filed by leave on 24 August 2009.

3 It names Ms Paino as plaintiff; MDN Mortgages Pty Ltd (“MDN”) as first defendant. The document indicates that five other defendants are the subject of the proceedings, but these are not named in this document. Since the notice of motion does not concern them, it is unnecessary further to identify them.

4 So far as the first defendant, MDN, is concerned, Ms Paino seeks the following orders:

“1. … that the contracts of loan and mortgage between [Ms Paino] and [MDN] (the ‘ Mortgages ’) be declared void in whole or in part;

2. In the alternative, an order varying in whole or in part the provisions of the Mortgages;

5 The amended statement of claim goes on to plead a case that may be encapsulated as follows. In what follows, I have…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NSWSC 898
Decision Date: 1 September 2009

CaseChat Overview and Summary

In the matter of Paino v MDN Mortgages Pty Ltd, the Federal Court addressed the application by the plaintiff, Paino, to restrain the defendant, a mortgage company, and its solicitor from proceeding in litigation in which the solicitor may act as a material witness. The plaintiff contended that the solicitor's potential dual role as both advocate and witness would prejudice the fairness of the proceedings. The court was tasked with determining the appropriate legal test to apply in assessing whether it was just and convenient to restrain the solicitor from acting for the defendant in the litigation.

The central legal issue before the court was the establishment of the proper test to determine whether a solicitor should be restrained from acting for a client in a case where they may also be a material witness. The court considered the implications of the solicitor's potential dual role on the fairness and integrity of the proceedings. It was necessary to weigh the interests of justice against the potential conflict of interest that the solicitor's role might present. The court examined the balance between the need for a fair trial and the practicalities of legal representation, particularly in cases where the solicitor's evidence might be scrutinised.

The court concluded that the appropriate test to apply was whether it was just and convenient for the solicitor to act in the circumstances, taking into account the interests of justice. In this case, the court found that the solicitor's potential role as a material witness, combined with the possibility that their evidence and conduct would be closely examined, warranted restraint. The court determined that the risk of prejudice to the fairness of the proceedings outweighed the practical considerations of legal representation. Consequently, the court granted the application to restrain the solicitor from acting for the defendant in the litigation, ensuring that the integrity of the proceedings would not be compromised.

The final orders of the court included a restraint on the solicitor from acting for the defendant in the litigation, recognising the potential for prejudice arising from their dual role as both advocate and material witness. This decision underscores the importance of maintaining the fairness and integrity of legal proceedings, particularly when the impartiality of a party's representative may be in question.

Orders