Tugrul v Tarrants Financial Consultants Pty Limited (in liquidation) [No 2]

[2013] NSWSC 1971

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Ken Tugrul v Tarrants Financial Consultants Pty Limited (in liquidation) [No 2] [2013] NSWSC 1971
Hearing dates:	19 December 2013
Decision date:	20 December 2013
Jurisdiction:	Equity Division
Before:	Kunc J
Decision:	Material returned to fifth plaintiff
Catchwords:	PRACTICE AND PROCEDURE - email communications with Judge's chambers - need for consent of all parties
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	R v Fisher [2009] VSCA 100; (2009) 22 VR 343
Category:	Procedural and other rulings
Parties:	Ken Tugrul (First Plaintiff) Kellie Tugrul (Second Plaintiff) Daniel Tugrul (Fifth plaintiff) Nassrin Tugrul (Fourth Plaintiff) K Bricks Pty Limited ACN 097 871 148 (Fifth Plaintiff) Tarrants Financial Consultants Pty Limited CAN 086 674 179 (First Defendant) Mervyn Ross Tarrant (Second Defendant) Stefanie Seco (Third Defendant) Wesfarmers General Insurance Limited ABN 24 000 036 279 trading as Lumley General (Fourth Defendants)
Representation:	Counsel: Mr D. Campbell SC, Mr A. Harding (Fifth plaintiff) Ms D. Hogan-Doran (Second Defendant) Mr A. Martin SC (Third Defendant) Solicitors: RMB Lawyers (Plaintiffs) Thomsons Lawyers (Second Defendant) Christopher Nicholls & Associates (Third Defendant
File Number(s):	2009/291166
Publication restriction:	No

Judgment

1. The Court is part heard in dealing with two notices of motion for security for costs. Those motions are brought by the second and third defendants, for whom Ms D. Hogan-Doran of Counsel and Mr A. Martin of Senior Counsel appear respectively. The motions are brought against the fifth plaintiff, for whom Mr D. Campbell of Senior Counsel appears with Mr A. Harding.

Summary

1. The day before the hearing of the motions was to resume certain material was sent by email to my chambers on behalf of the fifth plaintiff, notwithstanding the defendants' objection that part of the material should not be sent. This was drawn to my attention by Mr Martin SC at the resumption of the hearing yesterday and, upon his application (joined in by Ms Hogan-Doran), I ultimately returned all of the material sent to my chambers to the parties and made arrangements for the relevant email to be deleted from my associate's and tipstaff's inboxes.

1. I publish these reasons to explain why that was done. Perhaps even more importantly, these reasons should serve as a reminder to both branches of the profession that, save in limited circumstances, there should be no communication with a judge's chambers in relation to any matter before the Court without the consent of all other active parties to the proceedings.

The facts

1. The motions were last before me on 5 December 2013. On that occasion I adjourned the hearing to 19 and 20 December 2013 and made directions which included:

2. Direct the parties' accounting experts meet in conclave and produce a joint report to be served and filed with the Associate to Kunc J by 1.00pm on 18 December 2013 setting out:

(a) matters upon which they agree;

(b) matters upon which they disagree;

(c) in relation to areas of disagreement, a short statement of the reasons for that disagreement.

1. At the time of adjourning the matter I also informed the parties that, due to the exigencies of the list, there was at least a possibility that something less than two days would be available. I informed the parties that the exact situation would be confirmed to them closer to the adjourned date.

1. On 18 December 2013 (the day before the hearing was due to resume), my tipstaff sent an email at 11.51am to the parties' counsel:

I write to confirm that this matter is listed in front of Kunc J tomorrow, 19 December at 10.00am. His Honour has two days available for hearing if need be.

Please email to me or send up to Chambers any material that His Honour should read before tomorrow.

1. At 4.53pm on the same day an email was sent by the solicitor for the fifth plaintiff to my tipstaff and associate, copied to the solicitors for the second and third defendants.

Please find attached joint expert report prepared by Mr Ian Fargher and Mr Anthony Pickham in accordance with the orders made by His Honour on 4 December 2013.

We note that the Third Defendant has objected to the inclusion of Mr Pickham's notes to the report, however, the Plaintiffs' (sic) intend to rely on this information and include it for His Honour's attention accordingly.

1. At 5.32pm Ms Hogan-Doran sent an email to my tipstaff, copied to Mr Martin SC, my associate and the parties' solicitors:

This email is sent on behalf of myself as counsel for the second defendant and Mr Martin SC as counsel for the third defendant.

Neither of us was copied in on the email to the Court sent at 4.53pm and were not aware of its contents until just now.

The second and third defendants object to the Court giving attention to the documents contained in Annexure A and B to Mr Pickham's notes attached to the joint report in the version sent to the Court at 4.53pm.

1. In order to understand the emails to which I have just referred, it is necessary that I describe the form of the joint report which was sent to my chambers. It consisted of four numbered pages set out and paginated in a way which appeared to me to be a single document. Attached to it were what were described as Annexures A and B.

1. All of page 1 and half of page 2 of the document appeared to be, in its terms, the joint report of the parties' expert accountants, being Mr Fargher for the third defendant and Mr Pickham for the fifth plaintiff. It was signed by both of them approximately half way down page 2. The balance of page 2 contained what was described as "a note" signed by Mr Fargher. Page 3 was entirely taken up with a "note" signed by Mr Pickham which referred to Annexures A and B. Those annexures had not been tendered in evidence before me. While an attempt was made by the fifth plaintiff to describe them as such, neither of the notes from Mr Fargher and Mr Pickham, taken individually or together, met the description in my direction (see paragraph [4] above) of setting out matters upon which they disagreed and a short statement of the reasons for that disagreement.

1. Having sent the email to my chambers, the fifth plaintiff's solicitor telephoned my associate to ensure that the email had been received and to request that the attached report be drawn to my attention as soon as possible. Acting on that request, my staff provided me with a copy of the four page document and Annexures A and B. Unfortunately, the covering email was not drawn to my attention so I was unaware of its reference to the third defendant's objection to the inclusion of Mr Pickham's note and the annexures.

1. As matters turned out, I had read the four page document, including Mr Pickham's note, but not Annexures A and B, at the time when Ms Hogan-Doran's email was drawn to my attention. On the basis of Ms Hogan-Doran's email I did not proceed to read Annexures A and B. In reading Mr Pickham's note, I had observed that it referred to material which was not in evidence before me. I have already informed the parties that, in the circumstances, I have put the contents of Mr Pickham's note out of my mind. Its contents will only form part of my considerations if and when it and Annexures A and B are admitted into evidence.

1. At the resumption of the hearing yesterday, Mr Martin SC made an application that Mr Pickham's note and Annexures A and B be returned to the fifth plaintiff, given the objection which had been taken by the third defendant to those documents. Ms Hogan-Doran supported the application and explained that when she sent her email, she was not aware that the subject matter complained of was more than just Annexures A and B and extended to Mr Pickham's note.

Consideration

1. I accept Mr Martin SC's submission that a convenient statement of the relevant principles is to be found in the decision of Redlich and Dodds-Streeton JJA in R V Fisher [2009] VSCA 100; (2009) 22 VR 343, where their Honours say (emphasis added):

38 It is "important to bear in mind the characteristics of modern litigation" as Kirby and Crennan JJ said in Concrete Pty Ltd v Parramatta Design & Development Pty Ltd. It is common-place for judges, whether in the course of case management or otherwise, to be provided with bundles of materials, documents for tender, affidavits, and emails not all of which will be tendered or read. But in all such cases the party providing them is bound to simultaneously provide them to the other side. The circumstances in which direct communications may be made to the judge's associate are subject to important qualifications. Written communications between a party to litigation and the judge's associate should normally be confined to matters concerning practice or procedure. Communications including emails containing allegations, matters of substance or requests for substantive advice should not be forwarded to a judicial officer without the party's express agreement (save in an exceptional case warranted for example by an ex parte application).

39 Unless the subject of express prior consent of the other parties, written communications should not include information or allegations which are material to the substantive issues in the litigation. In all circumstances, the other parties to the litigation should be copied in on any such correspondence. If a communication which apparently fails to comply with those requirements is received in chambers, it would be for judicial staff promptly to enquire whether the other party has been notified before engaging in any further exchanges with the sender. The ubiquity and prevalence of informal email communications between courts and litigants entails many advantages but, unless approached with an appropriate protocol by litigants and within judges' chambers, presents potential risks of the errors demonstrated in the present case. (emphasis added)

1. Those principles are given regulatory expression by Rules A56 - A 58 of the Revised Professional Conduct and Practice Rules 1995 (the Solicitors' Rules), which provide:

A.56. A practitioner must not, outside an ex parte application or a hearing of which the opponent has had proper notice, communicate in the opponent's absence with the court concerning any matter of substance in connexion with current proceedings unless:

(a) the court has first communicated with the practitioner in such a way as to require the practitioner to respond to the court; or

(b) the opponent has consented beforehand to the practitioner dealing with the court in a specific manner notified to the opponent by the practitioner.

A.57. A practitioner must promptly tell the opponent what passes between the practitioner and a court in a communication referred to in Rule A.56.

A.58. A practitioner must not raise any matter with a court in connexion with current proceedings on any occasion to which the opponent has consented under Rule A.56(b), other than the matters specifically notified by the practitioner to the opponent when seeking the opponent's consent.

1. Identical provisions are to be found in the New South Wales Barristers' Rules 2011 and the Professional Conduct and Practice Rules 2013 which will apply to solicitors in this state from 1 January 2014.

1. Applying the Solicitors' Rules to the present case, the proper analysis is:

(1)   In accordance with the directions which I had made, the fifth plaintiff was entitled to email to my chambers the joint report of the accounting experts. However, there was a dispute between the parties as to whether Mr Pickham's note and Annexures A and B could properly be described as forming part of that report.

(2)   Given the third defendant's express objection, the fifth plaintiff's solicitor should not have transmitted Mr Pickham's note and Annexures A and B to my chambers.

(3)   The fact that the fifth plaintiff's solicitor's email drew attention to the third defendant's objection did not cure the breach.

1. A distinction needs to be drawn between where a party objects to material being transmitted to a judge at all and where a party consents to material being transmitted to a judge and to the judge reading it, notwithstanding that when it will be formally tendered or otherwise relied upon, objection will be taken to that material. In many cases, the latter course is a sensible one which can save time in court. However, no party should feel compelled to agree to material being provided in advance to a judge on that basis.

The correct approach

1. Email has done away with what might be thought to have been the last practical barriers to quick and easy communication with a judge's chambers. There are many types of communication, including by email, with a judge's chambers which can assist the parties and the Court in achieving a just, cheap and quick resolution of proceedings (see s 56 of the Civil Procedure Act 2005 (NSW)). This can include the advance provision of material proposed to be relied upon in court.

1. However, the natural and well intentioned desire on the part of legal practitioners to send a communication to a judge's chambers copied to all the parties, which, at first blush, might appear to promote the efficient conduct of proceedings must always be subordinate to the cardinal consideration that the impartiality of the judge must never be compromised (in fact or appearance) by communications sent without either the knowledge or consent of all parties. As I have said in paragraph [17] above, sending such a communication with a disclosure of the other parties' lack of knowledge or lack of consent does not cure any impropriety.

1. As a practical matter, and consistently with the principles and rules to which I have referred, I summarise the position as follows. There should be no communication (written or oral) with a judge's chambers in connection with any proceedings before that judge without the prior knowledge and consent of all active parties to those proceedings. Particularly in relation to written communications, given the ubiquity and speed of emails, the precise terms of any proposed communication with a judge's chambers should be provided to the other parties for their consent. There are four exceptions to this:

(1)   trivial matters of practice, procedure or administration (e.g. the start time or location of a matter, or whether the judge is robing);

(2)   ex parte matters;

(3)   where the communication responds to one from the judge's chambers or is authorised by an existing order or direction (e.g. for the filing of material physically or electronically with a judge's associate); and

(4)   exceptional circumstances.

1. There are three other matters. First, any communication with a judge's chambers which falls into any of the categories set out in sub-paragraphs [21] (2), (3) and (4) above should expressly bring to the addressee associate's or tipstaff's attention the reason for the communication being sent without another parties' knowledge or consent. Second, where consent has been obtained, that fact should also be referred to in the communication. Third, all written communications with a judge's chambers in relation to proceedings should always be copied to the other parties.

Resolution

1. In this particular case, the appropriate way to deal with what has occurred, given that there remains a dispute between the parties as to how much that was sent properly answers the description of the experts' joint report, is to return my print out of the covering email and the attachment in its entirety. I have also instructed my staff to delete the relevant email from their inboxes. The fifth plaintiff's solicitor, through counsel, has also offered an apology to both the Court and the other parties for what was a departure from proper practice. That characterisation must stand notwithstanding my ready acceptance that what has occurred was done with an honest and well intentioned belief as to its propriety.

Amendments

10 February 2014 - Number 2 judgment in a series of judgments

Amended paragraphs: Case title - [No 2] added to end of case title

Decision last updated: 10 February 2014