Palmer and Anor as Trustees of the J B and v M Palmer Superannuation Fund v Wootton and Ors T/as Levis Stace and Cooper (a Firm) and The Solicitors' Trust

[2002] TASSC 106

[2002] TASSC 106

CITATION:Palmer & Anor as Trustees of the J B & V M Palmer Superannuation Fund v Wootton & Ors T/as Levis Stace & Cooper (a Firm) and The Solicitors' Trust [2002] TASSC 106

PARTIES:  PALMER, John Blair
  PALMER, Veronica Myra

AS TRUSTEES OF THE J B & V M PALMER

SUPERANNUATION FUND
v
WOOTTON, Leon Roydon
CHURCH, Catherine Sue
WILLIAMS, Ronald David
TRADING AS LEVIS STACE & COOPER (A FIRM)

THE SOLICITORS' TRUST

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M326/2002
DELIVERED ON:  28 November 2002
DELIVERED AT:  Hobart
HEARING DATE:  18 November 2002
JUDGMENT OF:  Cox CJ

CATCHWORDS:

REPRESENTATION:

Counsel:
           Applicants:  R E Hudson
           1st & 2nd Respondents:                M E O'Farrell
           3rd Respondent:  M F Daly
           4th Respondent:  A D Davis
Solicitors:
           Applicants:  Butler McIntyre & Butler
           1st & 2nd Respondents:                Levis Stace & Cooper
           3rd Respondent:  Rae & Partners
           4th Respondent:  Tony David

Judgment  Number:  [2002] TASSC 106
Number of paragraphs:  5

Serial No 106/2002
File No M326/2002

JOHN BLAIR PALMER & VERONICA MYRA PALMER
AS TRUSTEES OF THE J B & V M PALMER SUPERANNUATION FUND
v LEON ROYDON WOOTTON, CATHERINE SUE CHURCH &
RONALD DAVID WILLIAMS TRADING AS
LEVIS STACE & COOPER (A FIRM) &
THE SOLICITORS' TRUST

REASONS FOR JUDGMENT  COX CJ
  28 November 2002

1. By originating application filed on 1 October 2002, the applicants sought an order pursuant to the Legal Profession Act 1993 ("the Act"), s111(1)(b), that the first named respondents ("the firm") be declared to be in default, and one pursuant to the Act, s111(2), that a Court fund be established.

1. In their affidavit in support, they claim that a sum of $150,000 of which they are trustees, was misappropriated by the respondent Williams at a time when he, Mr Wootton and Ms Church were the sole members of the firm.  Mr O'Farrell, who appears for Mr Wootton and Ms Church, opposes the making of any order at this stage because other claims of similar defaults by Mr Williams have been made involving an apparent loss in the order of $M1.25 - $M1.50 suffered by over 40 other clients.  These alleged misappropriations occurred at different times when the firm was variously constituted.  The Law Society of Tasmania, by originating application issued a fortnight before the present application, sought similar orders against respondents who include all previous partners of the firm since the first default is alleged to have taken place.

1. Mr O'Farrell submits that because of the complexity of the investigation it would be preferable not to make any of the orders sought in the present application at this stage and that it should proceed under the umbrella of the Society's proceedings.  He concedes the present applicants have a "legal right" to a default order (by which I understand him to mean that the conditions necessary for the making of such an order have been shown to exist) but submits that the making of the order is discretionary and that the court should not make it in the present circumstances.  These circumstances include the possibility that other clients affected by misappropriations might make similar applications leading to a proliferation of proceedings when the Law Society's application is designed to ensure that all clients affected have their claims processed in an orderly and cost effective way.

1. Although the Solicitors' Trust is obliged under the Act, s111(6), to pay into a Court fund such amount from the Guarantee Fund as is sufficient to meet the clients' claims there specified, it has a power under s111(6B) to determine the time or times at which the amounts it is obliged to pay are to be paid.  Under subs(6C) it may take into account (inter alia) any other known fiduciary default and the likely claims resulting from it and the amount of any other Court fund and any claims made or likely to be made on it.  In the present circumstances there is every likelihood that payments into the fund by the Solicitors' Trust will be guided by the progress of the Law Society's application on behalf of all known claimants and that the present applicants will gain no advantage over them by the making of the orders sought. 

1. In my view, the proper course is to adjourn the further hearing of the present application pending the outcome of the Law Society's proceedings.  So as to enable the applicants to retain, if not some control over, at least some opportunity to be heard should those proceedings not be pursued with diligence, or should other circumstances arise making review of this order appropriate, I will reserve liberty to apply.