Sharp v Rata International Pty Ltd - [2013] VSC 328

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 01964 of 2013

LYNDSAY ANNE SHARP (In her personal capacity and in her capacity as joint trustee of the Bromley Trust and the Havannah Trust) and DAVID ANTHONY SHARP (As joint trustee of the Bromley Trust)	Plaintiffs
v
RATA INTERNATIONAL PTY LTD (ACN 109 036 580) & ORS	Defendants

---

JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 May 2013
DATE OF JUDGMENT:	24 June 2013
CASE MAY BE CITED AS:	Sharp & anor v Rata International Pty Ltd & ors
MEDIUM NEUTRAL CITATION:	[2013] VSC 328

LEGAL PRACTITIONERS – Professional duties – Application by plaintiffs for order restraining solicitors from acting for first and second defendant while acting for third and fourth defendant – Duty of loyalty – Conflicting duties - Consent to act against third and fourth defendant “in the event a conflict arises” - Whether Court should exercise its inherent jurisdiction to enjoin continued retainer to protect due administration of justice – Fair-minded, reasonably informed member of the public would find it necessary for Court to intervene – Application allowed.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R. M. Garratt QC Mr D. G. Guidulin Mr S. Goubran	Maddocks
For the Defendants	Mr C. M. Scerri QC	Norton Gledhill

HIS HONOUR:

In this application the first plaintiff, Lyndsay Anne Sharp, and the second plaintiff, David Anthony Sharp, seek interlocutory orders restraining Norton Gledhill, commercial lawyers, from acting or continuing to act for and on behalf of the first defendant Rata International Pty Ltd (“Rata”), and the second defendant Godfrey Hirst Australia Pty Ltd (“GHA”) in this proceeding, and for orders setting aside the appearances filed on their behalf.

Rata and GHA are companies in the Godfrey Hirst group, which is engaged in the business of manufacturing, wholesaling, distributing and exporting carpets.

The shares in Rata are held by trusts associated with the plaintiffs, the third, fourth and fifth defendants.[1] Rata owns approximately 98.2% of the issued shares in GHA. The first plaintiff owns approximately 1.8% of the issued shares in GHA. The first plaintiff, Ms Sharp, and the fourth defendant, Rudyard Grant McKendrick, are siblings and directors of Rata.
[1]The Havannah Trust, the Bromley Trust and the Cornwall Trust. See Exhibit LAS3 to the affidavit of Lyndsay Anne Sharp sworn 17 April 2013.

By originating process filed on 18 April 2013, the plaintiffs commenced a proceeding seeking relief under Part 2F.1 of the Corporations Law. In affidavits filed in support, the plaintiffs apply to the court for relief from oppression, alternatively for orders for the compulsory purchase of the interests of the plaintiffs in Rata and of the interests of the first plaintiff in GHA.

On 26 April 2013, Norton Gledhill filed an appearance in the proceeding for the third defendant RGMC Pty Ltd (a company controlled by Mr McKendrick)[2] and the fourth defendant, Mr McKendrick.[3] Subsequently, Norton Gledhill filed appearances on behalf of the first and second defendants.…

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.

Keep reading for free

Create a free CaseChat account to read Sharp v Rata International Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2013] VSC 328
Decision Date: 24 June 2013

CaseChat Overview and Summary

Sharp v Rata International Pty Ltd involved a legal dispute where the plaintiffs sought an order to prevent their solicitors from acting for both the first and second defendants while also representing the third and fourth defendants. The nature of the conflict stemmed from the solicitors' potential conflicting duties due to their representation of parties with opposing interests. The matter was heard in the court, which had to decide whether it should exercise its inherent jurisdiction to enjoin the continued retainer of the solicitors to ensure the fair administration of justice.

The legal issue at the heart of this case was whether the court should intervene to prevent the solicitors from continuing their representation of all parties involved, given the risk of a conflict of interest. The court considered whether a fair-minded, reasonably informed member of the public would find it necessary for the court to intervene to protect the integrity of the legal process. The plaintiffs argued that allowing the solicitors to continue acting in such circumstances would undermine the due administration of justice, as it could lead to a breach of the solicitors' duty of loyalty and confidentiality.

In deciding the matter, the court found that the solicitors' continued representation of all parties did indeed present a significant risk of conflicting duties. The court concluded that the potential for a conflict was such that it was necessary to intervene to protect the fair administration of justice. It was held that a fair-minded, reasonably informed member of the public would consider it essential for the court to step in to prevent the solicitors from acting in these circumstances. Consequently, the court allowed the application and granted the order sought by the plaintiffs, prohibiting the solicitors from continuing to act for all defendants simultaneously.

Orders