Scandi International Pty Ltd v Larkfield Industrial Estate Pty Ltd
[2017] VCC 2090
•28 April 2017
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-16-02981
| SCANDI INTERNATIONAL PTY LTD | First Plaintiff |
| and CASUALLIFE FURNITURE INTERNATIONAL LIMITED | Second Plaintiff |
| V | |
| LARKFIELD INDUSTRIAL ESTATE PTY LTD | Defendant |
| And | |
| LARKFIELD INDUSTRIAL ESTATE PTY LTD | Plaintiff by Counterclaim |
and
SCANDI INTERNATIONAL PTY LTD First Defendant
by Counterclaim
and
CASUALLIFE FURNITURE INTERNATIONAL LIMITED Second Defendant
by Counterclaim
and
JOSEPH GUSS Third Defendant
by Counterclaim
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 April 2017 | |
DATE OF RULING: | 28 April 2017 | |
CASE MAY BE CITED AS: | Scandi International Pty Ltd & Anor v Larkfield Industrial Estate Pty Ltd | |
MEDIUM NEUTRAL CITATION: | XXX | |
RULING
Subject:Application to restrain solicitor from acting
Catchwords: Application to restrain solicitor from acting – invocation of court’s inherent jurisdiction – County Court lacks inherent jurisdiction – Summons dismissed
Legislation Cited: County Court Act 1958 (Vic); County Court Civil Procedure Rules 2008 (Vic); Legal Profession Uniform Law Application Act 2014 (Vic); Civil Procedure Act 2010 (Vic); County Court Civil Procedure Rules 2018 (Vic)
Cases Cited:Morgan v State of Victoria (2008) 22 VR 237; Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235; Kallinicos & Anor v Hunt & Ors (2005) 64 NSWLR 561; Grimwade v Meagher [1995] 1 VR 446; Black v Taylor [1993] 3 NZLR 403; Everingham v Ontario (1992) 88 DLR (4th) 755
Ruling:Summons dismissed
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J. Guss, In Person | |
| For the Defendants | Mr M. McKillop | HWL Ebsworth |
HIS HONOUR:
1 I have before me a Summons issued on behalf of Larkfield Industrial Estate Pty Ltd (“Larkfield”), which is defendant and cross-claimant, addressed to Mr Joseph Guss. The proceeding, which includes a claim and counterclaim, arises out of a bailment or warehousing arrangement between Larkfield as bailee or warehousing operator, and Scandi International Pty Ltd and Casual Life Furniture Limited. The Summons seeks the following orders:
(i)Mr Joseph Guss be restrained from appearing as an advocate and continuing to act for the plaintiffs in the proceeding;
(ii)The proceeding be stayed until the plaintiff’s appoint alternative solicitors and counsel.
2 There then followed prayers for certain types of consequential relief, which is unnecessary, at this point, to mention. In broad terms, the ground of the application is that Mr Guss is, in the circumstances, incapable of providing the disinterested advice and advocacy which representation of the plaintiffs in the proceeding requires. Mr Guss is not, so far as I am aware, said to be a statutory officer of either of the plaintiff companies. He is a defendant by counterclaim and, therefore, a party to the proceeding. Mr Guss appears today and raises a jurisdictional challenge to the Summons. He submits that relief of the type sought in the Summons is beyond this Court’s jurisdiction. He submits that, in the Victorian legal system, the only court empowered to grant such relief is the Supreme Court of Victoria, and not this Court. Mr McKillop, who appears on behalf of Larkfield, in making this application submits that this Court has jurisdiction as an inherent feature of its power to adjudicate on the dispute between the parties. I will turn, first, to Mr Guss’ contentions in support of his jurisdictional challenge. He took me, first, to a decision of the Court of Appeal in Morgan v State of Victoria (2008) 22 VR 237 at paragraph 144. The Court was there concerned with an issue of contempt of court in this Court. In the joint judgment, Nettle and Ashley JJA stated:
“The County Court has no inherent jurisdiction. But under s 54 of the County Court Act 1958 it is given the same jurisdiction and may exercise the same powers and authority in respect of any contempt of the County Court as the Supreme Court has and may exercise in respect of any contempt of the Supreme Court. It follows, we think, that in circumstances where a solicitor gives an undertaking in a proceeding before the County Court, and breaches it, the solicitor may be dealt with by the County Court in exercise of the disciplinary jurisdiction to the same extent as the Supreme Court might deal with the solicitor for breach of the undertaking given in a proceeding before the Supreme Court.”
3 Mr Guss says that this statement of principle indicates that powers to make orders, such as the type sought here, cannot be justified by any inherent jurisdiction because the Court of Appeal has held that this Court possesses no such inherent jurisdiction. Therefore, the jurisdiction to make an order or orders such as are sought by the Summons, must be found in some piece of legislation such as the County Court Act 1958, or delegated legislation such as the County Court Civil Procedure Rules 2008. Mr Guss then took me to s37(1) of the County Court Act 1958, which gives the Court general jurisdiction in all civil proceedings, except those which are expressly excluded. Section 49 of this Act grants the Court powers necessary to enable it to exercise that jurisdiction. He said, however, that this general grant of power did not extend to making an order restraining a practitioner from acting. Rule 27 of the Conduct Rules made under the Legal Profession Uniform Law Application Act 2014, the following year, in 2015, restricts the entitlement of the practitioner to act or appear where that practitioner is, or might be, a witness in a proceeding. Whether it is this rule that is specifically and directly relied upon or not, plainly, the principle which it enunciates is a principle which Larkfield appeals to in a general sense, in seeking the orders against Mr Guss.
4 Mr Guss says that this Court is given no powers or function under the Legal Profession Uniform Law statute or rules. Those powers are allocated either to the Victorian Civil and Administrative Tribunal or to the Supreme Court. He noted that s264 of the Legal Profession Uniform Law Application Act 2014 preserved the inherent jurisdiction and powers of the Supreme Court with respect to the control and discipline of Australian lawyers and stated that those powers were not affected by anything in the relevant chapter of the statute. He noted, next, that ss 447, 448 and 450 of the Legal Professional Uniform Law Application Act 2014, grant the Supreme Court power to give injunctions to Australian contraventions of the law or the Uniform Rules and power to vary or discharge them, and state that the Court’s powers under these provisions are in addition to, and not in substitution for, the Court’s inherent power of discipline and control over practitioners. The result, he said, is that matters of discipline and control are allocated to the Supreme Court, principally to the Victorian Civil and Administrative Tribunal, to some extent, and to this Court, not at all. He said that he had carried out an extensive review of the authorities in Australia as to this subject and he found a uniform pattern of applications relative to Australian practitioners being made in the relevant State or Territory Supreme Court and not in a County or District Court, that is, in a court of record, but not a superior court of record.
5 He took me to a decision of Bell J, sitting in the Supreme Court of Victoria, in Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235 (“Garde-Wilson”), where his Honour made an order restraining a law firm from acting in a proceeding relative to the plaintiff’s practicing certificate. Mr Guss submitted that the fact that the application there was brought to the Supreme Court rather than made in VCAT, where the original proceeding was taking place, indicated that what was being invoked was a power to discipline and control practitioners, not a power to control the adjudicative function. To put it another way, if a body other than the Supreme Court, as this State’s superior court of record and general jurisdiction, were appropriate, then the application would not have been brought in the Supreme Court. He also took me to the analysis of Bell J, which led him to the order. He said the power to restrain a practitioner from acting may derive from one of three different bases. At paragraph 37 of his Honour’s judgment, he said the first ground relates to possible misuse of confidential information. At paragraph 39, his Honour said the second ground relates to a possible breach of the fiduciary duty of loyalty that a lawyer owes to their present or former client. And, at paragraph 40, his Honour said, the third ground relates to ensuring the due administration of justice and the protection of the integrity of the judicial process. The result, therefore, submitted by Mr Guss was that this Court simply lacked jurisdiction to make the orders sought against him.
6 Mr McKillop, appearing for Larkfield, submitted that the power could be seen to derive from a number of sources. He referred, amongst other things, to the Court’s power to give directions, the general grant of power under s49 of the Act and to powers granted to the Court under the Civil Procedure Act 2010, in particular, under s47 thereof. Section 47 of the Civil Procedure Act 2010 empowers a court exercising civil jurisdiction to give directions to ensure that a civil proceeding was managed and conducted in accordance with the overarching purpose, as described by s7 of the Act and to make directions in the interests of the administration of justice, or in the public interest. Sub-section (2) states a direction or an order made under sub-s (1) may include, but is not limited to imposing any reasonable limits, restrictions or conditions in respect of:
(a) The management and conduct of any aspect of a civil proceeding; or
(b) The conduct of any party.
Mr McKillop noted that Mr Guss was, in fact, a party to the proceeding.
7 I should say, as to these various matters on which Mr McKillop relied, I am sceptical that a power merely to give directions, as is authorised by Order 34 of the County Court Civil Procedure Rules 2018, could ever be contemplated as extending to so important a matter as restraining a practitioner from acting. The power to give directions is a power, for instance, to order the filing of a pleading on a particular date or to direct that it be amended or struck out, or something of that sort. It is a purely procedural power. An injunction is a piece of interlocutory or final relief. I do not believe that a power to give directions extends to granting substantive relief in a proceeding. The decision of the Full Court of the Supreme Court in Exell v Exell [1984] VR 1 specifically establishes this point. I put Order 34, Rule 1, to one side.
8 I turn, next, to s49 of the County Court Act 1958. It states:
“The court shall as regards any civil proceeding within its jurisdiction for the time being have power to grant, and shall grant such relief, redress, or remedy, or combination of remedies, either absolute or conditional, and shall have power to make any order that could be made in regard to any civil proceeding, and shall give such and the like effect to every ground of defence or counter-claim, equitable or legal, in as full and ample a manner as might and ought to be done in the like case by the Supreme Court.”
I accept that if Mr McKillop’s submission as to the characterisation of the making of orders such as the one’s here sought is correct, namely, that it is an appurtenance to the adjudicative process rather than as, Mr Guss contends, an instance of discipline or controlling practitioners, s49 may very well extend to an authorised making of such an order.
9 As to s47 of the Civil Procedure Act 2010, it gives the Court power to manage civil proceedings and to make orders as to the conduct of parties, not power to make orders as to the conduct of practitioners. True, it is, that Mr Guss is a party, but the order which is being sought against him is an order with respect to him as practitioner rather than as party. Again, Mr McKillop said that the application could be reframed in a manner which, rather than being directed to Mr Guss, is directed to the plaintiff company, restraining it from employing Mr Guss. He was not able to point to any instance of an order along these lines having been made, that is, one directed to a party rather than to the practitioner. Mr McKillop’s submission was that the distinction between the two was a mere matter of form. In my view, this cannot be correct. This is illustrated, perhaps, by the so-called anti-suit injunction. This is an injunction whereby a party under the jurisdiction of a local court may be restrained from bringing proceedings in a foreign court on a subject matter which has already been litigated here in Victoria by a State or Federal court. It would be contrary to international comity to order that the foreign court stay the proceeding or any threatened proceeding, or that it not assume jurisdiction; but it is regarded as consistent with international comity to restrain a local party under the control and jurisdiction of a local court from bringing or continuing a foreign proceeding. This indicates, to my mind, that the identity of the person restrained is not a mere matter of form. The Summons before me is directed to Mr Guss and, for lack of any precedent to making an order directed to a party or parties in the litigation, I turn aside from that as a matter that it would be proper to consider. This Summons, I think, must, for that reason, be dealt with jurisdictionally on the basis of the wording which it now possesses, rather than upon some hypothetical, reframed basis.
10 That, then, brings me to what I believe is the fundamental question, and this is the characterisation of the nature of this application. In terms of the three-fold distinction drawn by Bell J, in Garde-Wilson, which is reflected in all of the other authorities to which I was taken, this application is clearly based upon the third category, that is, based upon the general interests of justice. As to this third category of application, Brereton, J, sitting in the Equity Division of the Supreme Court of New South Wales in Kallinicos & Anor v Hunt & Ors (2005) 64 NSWLR 561, said at page 571, paragraph [34]:
“The third basis was quite different, depending not at all upon equitable (or other) rights of the parties, but on the court's inherent supervisory jurisdiction over its officers, including its solicitors. It is that third basis for intervention that the plaintiffs seek to invoke in this case.”
This, in my view, is supportive of Mr Guss’ contention that the power to make orders such as the one sought against him, derives from the power of a superior court of record to control its officers, or to make disciplinary orders with respect to them rather than to something which is inherent in the adjudicative function.
11 I was taken to the judgment of Mandie J, in Grimwade v Meagher [1995] 1 VR 446 (“Grimwade v Meagher”). Interestingly, in Grimwade v Meagher, where his Honour made an order restraining the defendant from acting in a civil proceeding against the plaintiff, Sir Andrew Grimwade, the order was made, not in the proceeding from which Mr Meagher was sought to be restrained, but in a separate proceeding brought in the Supreme Court for that sole purpose. Mr McKillop drew my attention to a statement from a New Zealand authority, Black v Taylor [1993] 3 NZLR 403 (“Black v Taylor”), referred to with apparent approval by Mandie J, in which Richardson JA of the New Zealand Court of Appeal, referring to a right of audience on the part of solicitors, approved the following statement by the English Court of Appeal:
“ Such rights can only be restricted by statute, apart from an inherent right in all courts to refuse to hear any individual barrister or solicitor who is so conducting himself and this course [ie the exercise of the inherent right] is essential to the proper administration of justice.”
This passage is quoted by Mandie J at page 451 of the report. Mr McKillop submitted that this constituted a recognition by Richardson JA and Mandie J of an inherence of that power in all courts, not merely superior courts of record. If one analyses the case which was before the Court of Appeal in Black v Taylor, it came on appeal from the New Zealand High Court and, in my view, the reference to “all courts” being made in the context of a proceeding originated from a superior court of record, is unlikely to have been a deliberate statement by his Honour that the power of control was exercisable by courts other than superior courts of record. Again, Richardson JA had quoted from a Canadian decision, that is, from the Full Court of the Ontario Divisional Court in the case of Everingham v Ontario (1992) 88 DLR (4th) 755 at [761-2], where the Full Court there said:
“It is within the inherent jurisdiction of a superior court to deny the right of audience to counsel when the interests of justice so require by reason of conflict or otherwise.”
This passage was quoted by Mandie J at page 451 of his judgment in Grimwade v Meagher. All of this, I think, leads me to the view that Mr Guss correctly characterises the nature of the application before me today, and that is, an application based upon an inherent power of a court to discipline or control the conduct of officers appearing before it. Given that the inherent power of that description in Victoria belongs to the Supreme Court and the Supreme Court, alone, I accept Mr Guss’s jurisdictional challenge and dismiss the Summons for want of jurisdiction.
[Submissions as to costs]
12 I have given my reasons for dismissing the Summons listed before me today for want of jurisdiction. Mr Guss responded to the Summons and the successful party today contends that he should have his costs of the hearing of the Summons. Section 55 of the County Court Act 1958 specifically provides power to the Court to award costs where it dismisses or strikes out a matter for want of jurisdiction. Mr Guss relies upon that section and the general principle that, in court, costs follow the event, the event being his victory.
13 Mr McKillop opposes the making of that order. He submits the proper order is that there should be no order as to costs; the costs should be left to lie where they fall. Mr McKillop observes that he had no warning that the jurisdictional challenge, which was successful, was to be mounted. This application was, with its supporting material, served about a week ago, but Mr McKillop says, and I do not understand this to be disputed, that it has been foreshadowed for at least a month. Mr McKillop complains that while he and Mr Guss were waiting for this application to come on, with other matters in the Duty List being dealt with, there was no warning given to him of the jurisdictional challenge to be mounted. Mr Guss did not share with him the outline of submissions which he made and which proved, ultimately, to be successful. Mr Guss had said that he had extensive researches to make and it was only last night he was able to reach a final position and formulate his submissions. Even so, says Mr McKillop, to hold them back until the case was actually called on was inconsistent with the ethos mandated by the Civil Procedure Act 2010.
14 I have some sympathy for Mr McKillop’s opposition, but I must consider that, first, a jurisdictional point is a point that cannot be waived by a party. Acquiescence or agreement, in general terms, cannot give a court or tribunal jurisdiction which it does not possess. Mr Guss was surely right in saying that when this application was launched, the defendants made their judgement and took the risk as to whether it was within jurisdiction, or otherwise. Again, those defendants had the opportunity to make their own researches.
15 Accordingly, whilst I think that it might have been desirable and proper for Mr Guss to have foreshadowed the application which he was going to make to enable the defendants to reconsider their position, this departure from optimum conduct is not so significant as to deprive Mr Guss of the costs which would ordinarily come his way, based on the principle of costs following the event, and so I will order that the defendants pay Mr Guss’ costs of the Summons to be taxed in default of agreement on a standard basis.
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