Williamson v Metaxas and Vernon
[2004] WASCA 248
•3 NOVEMBER 2004
WILLIAMSON & ANOR -v- METAXAS & VERNON & ANOR [2004] WASCA 248
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 248 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:59/2003 | 13 AUGUST 2004 | |
| Coram: | TEMPLEMAN J WHEELER J JENKINS J | 3/11/04 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Application in 59/03 dismissed, Appeal in 143/02 allowed | ||
| B | |||
| PDF Version |
| Parties: | IAN EDWARD WILLIAMSON YOGANATHAN SOOBIAH NAIDOO METAXAS & VERNON CHARLES PHILIPPE LOUIS NILANT YOGAN SOOBIAH NAIDOO |
Catchwords: | Appeals Application for leave to appeal Miscarriage of discretion Object of requiring leave Injunctions Legal practice Restraint of solicitor alleged to be in conflict of interest between two clients Solicitor nominally on record for one of the clients Extent, if any, that interests adverse to each other |
Legislation: | Nil |
Case References: | Wing Luck Foods v Lei Choo Lim (1989) WAR 358 Dobree v Hoffman (1996) 18 WAR 36 Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196 Gallo v Dawson [1990] 93 ALR 479; 64 ALJR 458 Kwa v City of Stirling, FCt SCt of WA; Library No 990169; 16 March 1999 National Australia Bank v Wily [2002] NSWSC 573 Re Allebart Pty Ltd (in liq) [1971] 1 NSWLR 24 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : WILLIAMSON & ANOR -v- METAXAS & VERNON & ANOR [2004] WASCA 248 CORAM : TEMPLEMAN J
- WHEELER J
JENKINS J
- First Applicant (First Plaintiff)
YOGANATHAN SOOBIAH NAIDOO
Second Applicant (Second Plaintiff)
AND
METAXAS & VERNON
First Respondent (Second Defendant)
CHARLES PHILIPPE LOUIS NILANT
Second Respondent (Defendant)
- Appellant (Second Defendant)
AND
IAN EDWARD WILLIAMSON
First Respondent (First Plaintiff)
(Page 2)
- YOGAN SOOBIAH NAIDOO
Second Respondent (Second Plaintiff)
CHARLES PHILIPPE LOUIS NILANT
Third Respondent (First Defendant)
ON APPEAL FROM:
For File No : FUL 59 of 2003
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER NEWNES
Citation : METAXAS & VERNON (A FIRM) -v- WILLIAMSON & ORS [2003] WASCA 328
File No : FUL 143 of 2002
For File No : FUL 143 of 2002
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : McKECHNIE J
Citation : WILLIAMSON & ANOR -v- NILANT [2002] WASC 225
File No : COR 313 of 2000
Catchwords:
Appeals - Application for leave to appeal - Miscarriage of discretion - Object of requiring leave
Injunctions - Legal practice - Restraint of solicitor alleged to be in conflict of interest between two clients - Solicitor nominally on record for one of the clients - Extent, if any, that interests adverse to each other
Legislation:
Nil
(Page 3)
Result:
Application in 59/03 dismissed
Appeal in 143/02 allowed
Category: B
Representation:
FUL 59 of 2003
Counsel:
First Applicant (First Plaintiff) : Mr K C B Staffa
Second Applicant (Second Plaintiff) : Mr K C B Staffa
First Respondent (Second Defendant) : Mr A Metaxas
Second Respondent (Defendant) : No appearance
Solicitors:
First Applicant (First Plaintiff) : Staffa Lawyers
Second Applicant (Second Plaintiff) : Staffa Lawyers
First Respondent (Second Defendant) : Metaxas & Vernon
Second Respondent (Defendant) : No appearance
FUL 143 of 2002
Counsel:
Appellant (Second Defendant) : Mr A Metaxas
First Respondent (First Plaintiff) : Mr K C B Staffa
Second Respondent (Second Plaintiff) : Mr K C B Staffa
Third Respondent (First Defendant) : No appearance
Solicitors:
Appellant (Second Defendant) : Metaxas & Vernon
First Respondent (First Plaintiff) : Staffa Lawyers
Second Respondent (Second Plaintiff) : Staffa Lawyers
Third Respondent (First Defendant) : No appearance
(Page 4)
Case(s) referred to in judgment(s):
Wing Luck Foods v Lei Choo Lim (1989) WAR 358
Case(s) also cited:
Dobree v Hoffman (1996) 18 WAR 36
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Gallo v Dawson [1990] 93 ALR 479; 64 ALJR 458
Kwa v City of Stirling, FCt SCt of WA; Library No 990169; 16 March 1999
National Australia Bank v Wily [2002] NSWSC 573
Re Allebart Pty Ltd (in liq) [1971] 1 NSWLR 24
(Page 5)
1 TEMPLEMAN J: There are two matters before the Court. The first is an application by Ian Edward Williamson and Yoganathan Soobiah Naidoo for leave to appeal against the decision of a Master to extend the time for the solicitors Metaxas & Vernon to enter an appeal against a decision of a single Judge of this Court.
2 The Judge's decision was that the solicitors Metaxas & Vernon should be restrained from acting for Charles Philippe Louis Nilant, the liquidator of a company known as LPO Transact Pty Ltd, in which Williamson and Yogan were shareholders.
3 The second matter is the substantive appeal against the decision of the learned primary Judge.
4 It will be convenient to refer to the applicants in the way the Judge did, as Williamson and Yogan.
The application for leave to appeal
5 The Judge's decision was delivered on 18 September 2002. Although the application to the Judge was to restrain Metaxas & Vernon from acting, they were not parties. However, they applied to be joined subsequently, so that they would have standing to appeal. That application was successful: and on 8 October, Metaxas & Vernon lodged their notice of appeal.
6 The order by which Metaxas & Vernon were restrained from acting was, I think, final. Although the order did not dispose of the action, it put an end to their right to represent the liquidator. That being so, Metaxas & Vernon were entitled to appeal as of right. Order 63 of the Rules of the Supreme Court therefore applied to the appeal.
7 By operation of O 63 r 7, the appeal should have been entered by 24 December 2002. However, the Court was not able to list the appointment for the Registrar to settle the appeal book index until 4 December 2002.
8 It is not clear from the materials before the Master what steps were taken to prosecute the appeal after the appeal book index had been settled. However, nothing of any consequence appears to have happened until 30 January 2003 when Metaxas & Vernon sent an appeal book to the applicant's solicitor, Mr Staffa, for his perusal.
9 We were told by Mr Metaxas, who appeared for his firm, that it was necessary to re-type some of the affidavits to remove material which had
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- been ruled inadmissible. However, this could not have been a major exercise. The appeal book is not substantial. It contains 156 pages.
10 Following receipt by Mr Staffa of the appeal book, there was some further delay while Mr Staffa and Mr Metaxas argued in correspondence about the appropriateness of the appeal book and whether the certificate of correctness should be signed. It is not necessary to refer to the correspondence: I think the Master's assessment was entirely accurate. He said:
"It is clear from the forcefulness of the language with which the parties have put their positions in the correspondence between them that each holds very strong and sincere views that the fault lies with the other." (AB 13)
11 I would add that I find it disappointing, to say the least, that two practitioners, each of over 25 years' standing in the profession, should bicker as Mr Metaxas and Mr Staffa did. In these days when the courts are insistent on conferral, I should have expected the issues to be resolved quickly and cheaply in the course of a telephone conversation.
12 The application to extend time for entering the appeal was filed on 4 March 2003.
13 In his reasons for granting the extension of time, the learned Master said he accepted Mr Metaxas' submission that no period before 24 December 2002 (the date on which the appeal should have been entered) could properly be categorised as delay. As the Master saw it, the relevant period of delay was from 24 December 2002 to 4 March 2003.
14 The Master referred to Mr Staffa's submission that there had been no explanation for the delay. The Master said there were periods for which there was no specific explanation, principally the period from 24 December 2002 to 30 January 2003.
15 In my view, with all respect to the learned Master, he erred in holding that no period before 24 December 2002 could properly be categorised as delay. In my view, it is not possible to say whether there has been delay unless one knows what (if any) steps were taken during the relevant period: and if none, the reason for the inactivity.
16 Other than telling us from the bar table about the need to re-type affidavits, Mr Metaxas gave no account of steps taken between 4 December 2002 when the appeal book index was settled, and 30 January
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- 2003 when the appeal book was sent to Mr Staffa. The learned Master therefore had no explanation for at least that part of the delay.
17 That is not to say the Master was precluded from exercising his discretion to grant an extension of time in which to enter the appeal for hearing. However, in my view, the Master's discretion miscarried because he approached the question whether an extension of time should be granted, on the wrong basis.
18 That is not the end of the matter. The applicants have no right of appeal from the learned Master's decision: they are required to obtain the leave of the Court pursuant to s 60(1)(f) of the Supreme Court Act 1935.
19 The object of the requirement for leave is to reduce the number of appeals of this kind: Wing Luck Foods v Lei Choo Lim (1989) WAR 358 at 360. The criteria for the grant of leave are set out in Seaman on Civil Procedure at par [63.0.23] in the following terms:
"In general the court must be satisfied that the decision below is attended with sufficient doubt to justify the grant of leave and that a substantial injustice would be done if it remains unreversed. Leave will be more readily granted if the order changes substantive rights. There is a broad discretion to grant or withhold leave and whether substantial injustice will occur depends on all the circumstances of the case …. There are, however, no rigid or exhaustive criteria and the need to discourage unnecessary interlocutory appeals is such that, except where some special point of importance is involved, the fact that the decision below is attended by such doubt or works an apparent justice does not warrant leave …."
20 In the present case, it is abundantly clear that the learned Master's order extending the time for entering the appeal for hearing works no injustice on the present applicants. They were concerned about the potential for conflict arising from the fact that Metaxas & Vernon were perceived to have been acting both for the liquidator of LPO Transact Pty Ltd and one of the shareholders of the company who was the defendant to an action the company had brought against him. At the material time, the company was subject to the control of the liquidator.
21 However, as I shall explain in more detail in my reasons in the substantive appeal, there was, in fact, no conflict: and the potential for conflict had evaporated by the time the Judge gave his decision to restrain Metaxas & Vernon from acting. That is because, on the materials filed by
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- the applicants, it appeared that the liquidator no longer had any desire to have Metaxas & Vernon act for him.
22 Mr Staffa submitted that his clients would suffer an injustice if the order they had obtained from the Judge, restraining Metaxas & Vernon from acting for the liquidator, was reversed on appeal. But, there can be no injustice to a party resulting from the correction of error by a court, even though that works against the interest of the party concerned.
23 Mr Staffa pointed also to the notice of appeal in which orders for costs of the application and the costs of the appeal were sought against his clients.
24 However, if Mr Staffa had simply acknowledged his clients' lack of interest in the outcome of the appeal, taken no part in the appeal and agreed to abide by the decision of the Court, I think it inconceivable that any costs of the appeal would have been awarded against the respondents. This is particularly so, given that Metaxas & Vernon were acting for themselves. If the costs of the original application were awarded against Mr Staffa's clients, there would be no injustice, for the reasons given above.
25 Mr Staffa said also that his clients were concerned about the possibility that Metaxas & Vernon might at some date in the future act again for the liquidator. However, such a concern could hardly justify the continuation of any restraint which had been imposed in error by the primary Judge.
26 For these reasons, while I am of the view that the learned Master's discretion miscarried, I do not think a case has been made out for granting leave to appeal against his decision extending the time for entering the substantive appeal. I would therefore dismiss the application and deal with the substantive appeal.
The substantive appeal – FUL 143 of 2002
Background
27 As I have noted above, Williamson and Yogan were shareholders in LPO Transact Pty Ltd. There was a third shareholder: Rama Krishna Marriemuthu Naidoo. I will refer to him, as the Judge did, as Rama.
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28 At some stage (the precise date is irrelevant) LPO Transact Pty Ltd brought an action against Rama in the District Court claiming the price of shares which, it was alleged, remained unpaid.
29 Rama applied subsequently to have the company wound up. He alleged misconduct on the part of Williamson and Yogan. Rama's application was successful and Mr Nilant was appointed as the liquidator.
30 Rama then funded an examination of Williamson and Yogan by the liquidator, pursuant to s 596A of the Corporations Law. The examination was conducted in September and December 2000. The liquidator was represented in the examination by Metaxas & Vernon.
31 On 21 November 2000 Williamson and Yogan brought application COR 313 of 2000 for the purpose of removing the liquidator and querying some of his accounts. They sought also to have the liquidation set aside and the company restored. Metaxas & Vernon acted for the liquidator.
32 On 13 November 2001, Metaxas & Vernon became the solicitors on the record for Rama in the District Court action.
33 On the following day, 14 November 2001, Metaxas & Vernon advised the liquidator at a creditor's meeting.
34 By application dated 16 May 2002, Williamson and Naidoo brought an application to restrain Metaxas & Vernon from acting for the liquidator in COR 313 of 2000.
35 The application came before the Judge on 30 August 2002 and judgment was delivered on 18 September 2002.
36 In his reasons, the Judge set out the history in the way in which I have summarised it. In addition, his Honour noted that Metaxas & Vernon were then acting for Rama in a number of actions.
The Judge's conclusion
37 The Judge held that before 13 November 2001, Metaxas & Vernon had no conflict of interest. The Judge noted that before that date Mr Metaxas had appeared on the examination of Williamson and Yogan, on the instructions of the liquidator. However, his Honour said, there was no evidence that Metaxas & Vernon had been retained by Rama: and the fact that Rama had funded the examinations did not give rise to a conflict. His Honour noted that interested parties would often fund actions by
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- liquidators and that provided the practitioner's loyalty between clients was not compromised, there could be no objection to that course.
38 His Honour continued:
"Since 13 November 2001 however, it seems to me that Metaxas & Vernon have been caught in a hopeless conflict. They owe a duty of loyalty to Rama. They also owe a duty of loyalty to the liquidator, together with a duty to advise the liquidator in circumstances where the liquidator is obliged to act objectively and impartially. Any advice tendered by the solicitors or actions recommended by them must be seen against a background where there is a liquidation on the basis of oppression and an insoluble conflict between the two camps directly interested in the liquidation, one of whom is also the client of the same solicitors." (AB 9)
39 The reference to one of the persons involved in the conflict being the client of Metaxas & Vernon, was clearly a reference to Rama. As I have noted, it appeared Metaxas & Vernon were acting for him, having regard to the fact that they were on the record for Rama in the District Court action.
40 However, Mr Metaxas explained the circumstances in which that came about. In par 5 of his affidavit sworn 5 June 2002, which the Judge set out in his reasons, Mr Metaxas said:
"5. … It was not my intention to act in the proceeding but Rama Naidoo's previous solicitors Paiker & Overmeire refused to deliver to me files in relation to CIV 1855 of 1999 unless I agreed to also file a change of solicitor in respect of the District Court proceedings. As Rama Naidoo was anxious that I should act for him in the Supreme Court action CIV 1855 of 1999 I agreed to file a notice of appointment as required by Paiker & Overmeire. Since getting on the record in the District Court action no steps have been taken in the proceedings. I have never advised the liquidator in respect of the District Court. I have asked the third defendant to retain another firm to act for him in the District Court and he has agreed. As no steps have been taken in the proceedings I simply sought to spare my client the
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- expense of retaining a solicitor to act when there was no need."
41 I have serious reservations about the propriety of a solicitor purporting to act for a party to litigation by entering on the record on his behalf while at the same time having no intention of acting in the proceedings.
42 That is not, however, a matter which need be pursued in this appeal. It is sufficient to note that when the question was raised with Mr Metaxas during the course of argument, he very properly said he accepted the criticism.
43 What is relevant, in my view, is the fact that Mr Metaxas' explanation was not challenged. It was not sought to cross-examine him on his affidavit. That being so, I see no reason to doubt his explanation: nor did the Judge say he rejected it.
44 It may be noted that Metaxas & Vernon remained on the record only until 15 July 2002 when there was a further change of solicitors. As I understand the position, the action remained dormant during the period in which Metaxas & Vernon were nominally on the record for Rama. Furthermore, the solicitors on the record for LPO Transact Pty Ltd were Clayton Utz, who took instructions from the liquidator: see the Judge's findings at AB 7.
45 I return to the Judge's reasons. His Honour said that submissions filed on behalf of "the defendant" gave support to the view that the roles of Metaxas & Vernon had become "intertwined". (The reference to "the defendant" in this context, is a reference to the liquidator although, of course, the submissions were those of Metaxas & Vernon).
46 With respect, it is not clear why the Judge took that view, since his Honour made no specific reference to circumstances from which such intertwining could be inferred. However, his Honour did refer to other litigation involving Yogan and his mother on one side and Rama on the other, in which Metaxas & Vernon were acting for Rama.
47 This appears to have been a reference to Williamson's affidavit of 15 May 2002 in which he deposed to the fact that Metaxas & Vernon acted both for Rama and for the liquidator.
48 Williamson set out these matters in par 18 of his affidavit (AB 22). Mr Metaxas responded in his affidavit of 5 June 2002, in par 4 (AB 107).
(Page 12)
49 The first matter to which Williamson referred was that Metaxas & Vernon represented Rama in Supreme Court proceedings CIV 1855 of 1999 in which Rama was being sued by Yogan and Yogan's mother. Rama was said to have a counterclaim against Yogan in those proceedings.
50 In his response, Mr Metaxas said the proceedings concerned claims relating to a property development in Northbridge and the entitlement of the respective parties in respect of matters relating to that development. Mr Metaxas said there was no issue in those proceedings which concerned LPO Transact Pty Ltd or the liquidator.
51 The second matter to which Williamson referred is Supreme Court proceedings CIV 2734 of 2000 brought by Yogan's mother against Rama and his wife and the public advocate. Metaxas & Vernon became the solicitors on the record for Rama and his wife on 14 March 2001.
52 Mr Metaxas explained that the action arose out of an investigation by the public advocate as to whether a guardian should be appointed to preserve the interests of Yogan's mother. The claim had been dismissed. The proceedings had nothing to do with LPO Transact Pty Ltd.
53 Williamson then referred to the fact that Metaxas & Vernon represented the liquidator in the examination under s 596A of the Corporations Law, in relation to the company. As I have noted above, those applications were funded by Rama. However, the examination was concluded before Metaxas & Vernon entered on the record for Rama (albeit nominally) in the District Court action. And as the Judge said, the fact that Rama funded the examination did not give rise to a conflict.
54 Further, Mr Metaxas said, the focus of the examination was on the circumstances in which the company's assets were distributed to Williamson and Yogan. There was therefore no conflict between them and Rama in any event.
55 Yogan countered this assertion by saying that although Mr Metaxas contended that the proceedings between himself and his mother against Rama had nothing to do with LPO Transact Pty Ltd, Mr Metaxas sought to cross-examine him on that matter during the liquidator's examination pursuant to s 596A of the Corporations Law. In support of that contention, Yogan exhibited a page of the transcript of the examination, in which Mr Metaxas asked Yogan whether the differences between himself and Rama related exclusively to the business of the company or was related to some other venture between them.
(Page 13)
56 Yogan answered by saying there were "some other affairs" before the Supreme Court at the time (on 26 September 2000). Mr Staffa (and, it seems, the Registrar before whom the examination was being conducted) warned Mr Metaxas that the matter had nothing whatever to do with the company. This, I think, supports Mr Metaxas' point.
57 Finally, as I have noted above, Williamson referred to the fact that Metaxas & Vernon represented and advised the liquidator at a meeting of creditors of LPO Transact Pty Ltd on 14 November 2001.
58 As to that, Mr Metaxas said his firm represented and advised "Dr Naidoo" at the creditors' meeting. This appears to be an error. As I understand the position, it is common ground that Metaxas & Vernon acted for the liquidator at the meeting. The minutes record that fact (AB 37).
59 The Judge's finding was that:
"Ms Vernon is a partner in Metaxas & Vernon. Williamson and Yogan attended as the substantial creditors of the company. Ms Vernon took part in the meeting and separately advised the liquidator about a particular matter raised by Williamson and Yogan." (AB 8)
- There is no challenge to the Judge's finding about Metaxas & Vernon's role at the meeting.
60 No attempt was made to cross-examine Mr Metaxas on his affidavit in the proceedings before the Judge. That being so, there is no reason not to accept Mr Metaxas' account of his respective retainers on behalf of Rama. They were separate and distinct matters. With all respect to the Judge, I can see nothing in the evidence which justifies his finding that Metaxas & Vernon had "instructions to act generally for Rama".
61 In his reasons, the Judge noted that this was not a case in which it was said the solicitor had come into possession of confidential information while acting for one client, with the risk that such information might be disclosed while acting for another. Nor was it a case where the solicitor had some stake in the outcome of the proceedings such as to raise a query as to his independence. Rather, the Judge said:
"This is a case which falls within the inherent jurisdiction of the Court and particularly in the necessity of the Court to control its processes and those of its officers, including liquidators."
(Page 14)
62 His Honour continued:
"It is well settled that the Court's inherent jurisdiction to preserve the proper administration of justice extends to restraining a legal practitioner from acting in a particular case: Abse v Smith [1986] QB 536; Black v Taylor [1993] 3 NZLR 403; Grimwade v Meagher (1995) 1 VR 446. In the latter case Mandie J stated the relevant test at 452 in terms I accept and adopt:
'The objective test to be applied in the context of this case is whether a fair minded reasonably informed member of the public would conclude that the proper administration of justice required that counsel be so prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause.'
Applying that test to the evidence, I am satisfied that the conflict which may arise between the interests of Rama, which the solicitor must legitimately advance, and the necessity to give impartial advice and representation to the liquidator of LPO Transact Pty Ltd is such that the interests of justice require the solicitor be restrained from acting for the liquidator and I so order."
63 While accepting the validity of the test, I do not think it should have led his Honour to the conclusion he reached. As is said in Seaman on Civil Procedure, par [34.0.5]:
"The court cannot conclude that there has been a breach of duty of loyalty by a solicitor acting for two clients without examining the extent to which, if at all, the interests of the two clients are adverse to each other: Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd BC 2002 204519; [2002] VSC 324 at [25]."
64 I conclude that while Metaxas & Vernon were acting for the liquidator in COR 313 of 2000, generally and on 14 November 2001 in particular, they were (or may have been) acting for Rama in two matters in the Supreme Court. However, neither of those matters had any connection with LPO Transact Pty Ltd. There was, therefore, no conflict. The interests of their respective clients were not adverse.
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65 Mr Staffa, for the respondents, contends that in this case, there was at the very least, a perception of conflict. However, as the Judge said, the test involves a consideration of the perception of "a fair minded, reasonably informed member of the public". For the reasons given above, I do not think such a person would have held such a perception and I am therefore of the view that the learned Judge fell into error in reaching the conclusion he did.
66 I therefore conclude that the appeal should be allowed.
67 WHEELER J: I have had the advantage of reading in draft the reasons for decision of Templeman J and Jenkins J. Their Honours have dealt with the background to these matters, and it is not therefore necessary for me to do so.
68 I am entirely in agreement with Jenkins J, for the reasons given by her Honour, that the learned Master's discretion miscarried in granting the application to extend time. There was a significant unexplained period of delay following 24 December 2002, that being the date on which the appeal should have been entered for hearing. Further, while there was strictly no "delay" prior to that date, the activities, if any, of Metaxas & Vernon leading up to that date should have been put to the Master as part of the context against which he could evaluate the delay after that date. In addition, it was relevant that it appeared that by the time at which the Master's decision came to be made, the liquidator no longer had any desire to have Metaxas & Vernon act for him in any event, so that there was in that sense no live issue requiring resolution.
69 However, Metaxas & Vernon had at the time of the learned Master's decision been joined as a party, and an attempt to revoke the order joining them was not successful. Metaxas & Vernon, having been regularly joined, had instituted their appeal within time. The Master's decision extending time within which they could take the further procedural step of entering the appeal for hearing was a discretionary one against which there is no appeal as of right.
70 Applying to that decision the criteria for the grant of leave, set out in Seaman on Civil Procedure at par [63.0.23] (and quoted in the reasons of Templeman J) it is plain that the first criterion – that the decision below is attended with sufficient doubt – has been satisfied. However there is, in my view, nothing in the circumstances of this case to indicate that a "substantial injustice" would be done unless leave to appeal the Master's decision was granted.
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71 The liquidator plainly has no further interest in the action, would not participate in the appeal, and would therefore not be affected by the continuation and determination of the appeal. Since the liquidator no longer wishes Metaxas & Vernon to act, the interests of Mr Staffa's clients, in preventing that firm from acting, have evaporated. It was open to them to take no part in the appeal and to abide by the decision of the Court if they wished.
72 It is true that, if the appeal proceeded and were determined in a way which reversed the orders restraining Metaxas & Vernon from acting, it would be likely that costs of that original application might be obtained against Mr Staffa's clients. However, if that original order had been made in error, the effect of reversing it and of making an order for costs reflecting the changed position would only be to achieve the result which in law ought to have been achieved in the first place.
73 In my view, it is important that the clear policy of the Rules in discouraging unnecessary interlocutory appeals should be maintained, and that more than mere error must generally be demonstrated to justify a grant of leave to appeal in such a case. Notwithstanding, therefore, my view that the Master was plainly in error in making the order which he did, I would not grant leave to appeal against that order.
74 Turning to consider the merits of the appeal, I would express my agreement with the reasons of Templeman J and would, for those reasons, allow the appeal.
75 JENKINS J: I have had the benefit of reading in draft the judgment of Templeman J. I am grateful to his Honour for setting out the facts and relevant legal principles. I respectfully adopt what his Honour has said in these respects. However, I am unable to agree with his Honour's conclusion that the application, in FUL 59 of 2003, for leave to appeal the learned Master's decision to extend the time within which the firm of solicitors, Metaxas & Vernon ("the first respondent") had to enter its appeal in FUL 143 of 2002 ought to be dismissed.
76 Templeman J has explained why the Master's discretion in granting an extension of time miscarried. It is because the Master approached the issue before him on the wrong basis in that he failed to take into account the period between 8 October and 24 December 2002 in considering the length of the delay and the reason for the delay in entering the appeal for hearing.
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77 The Master said that the factors that he would take into account were explanation for the delay, the length of the delay and whether the respondents or the administration of the court would be prejudiced by the delay. These are generally recognised as being the relevant factors. He said that the merits of the appeal were not generally relevant. Again, this is accepted. There is no need for me to detail the emphasis that some Judges have put on the relevance of some factors as opposed to others. It is sufficient for me to say that the weight given to each factor will depend upon the facts of the case.
78 The Master said that there is "no evidence, or any reason to believe, that the administration of the court would be adversely affected by extending the time". With respect, I do not agree. The issue was whether the prejudice to the court in having to manage, hear and determine an appeal that would otherwise not be heard because it was not entered within time was or was not outweighed by the interests of justice in allowing an appellant to exercise their right of appeal.
79 In my view there was undoubted prejudice to the administration of the court in allowing the application to extend time which was not outweighed by the interests of justice in allowing the appeal to proceed. Add to this factor the absence of a cogent explanation for the delay in entering the appeal for hearing between 18 October 2002 and 30 January 2003 and it is clear that the Master's discretion miscarried.
80 The background to the application in FUL 59 of 2003 is that Williamson and Yogan ("the applicants") applied to restrain the first respondent from acting for Nilant in COR 313 of 2000. The applicants are the first and second plaintiffs and Nilant is the defendant in COR 313 of 2000. By judgment delivered on 18 September 2002, the first respondent was so restrained because the learned Judge was of the view that the first respondent had a conflict of interest. However, unlike the applicants and Nilant, the first respondent was not, at that stage, a party to COR 313 of 2000. Hence it had no right of appeal. It then successfully applied ex parte, for leave to be joined as a party for the sole purpose of permitting it to appeal the decision. Heenan J, when making the order for joinder, gave the other parties liberty to apply to revoke the order after it had been served upon them. Pursuant to that leave the applicants applied to revoke the order but were unsuccessful before Roberts-Smith J: Williamson & Anor v Nilant [2003] WASC 21.
81 Roberts-Smith J said that Mr Metaxas put the first respondent's case on the basis that the restraint was made directly against the solicitors and
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because a finding of conflict of interest in the circumstances is tantamount to a finding of unprofessional conduct. His Honour rejected this second submission and said that it would depend upon the facts and circumstances of the particular case. He accepted that a finding that a firm of solicitors has acted in a situation in which it has a conflict of interest is a finding which on the face of it does reflect adversely on the firm professionally. His Honour determined that because the first respondent was bound by the decision and in the circumstances of the case it was proper and appropriate that it should remain as second defendants in the proceedings.
82 The first respondent then instituted an appeal from the learned Judge's decision to restrain it from acting for Nilant. The appeal became FUL 143 of 2002. The first respondent had one possibly legitimate purpose in seeking to be joined as a party and that was to enable it to appeal the decision to restrain it from acting for Nilant. In turn it had three possibly legitimate interests in appealing the conflict of interest decision. The first was to vindicate its right to represent Nilant in the proceedings, the second was to seek to protect its reputation (practically speaking, Mr Metaxas' reputation) and the third was simply because the order bound the firm.
83 The first interest did not require the first respondent to be joined for the purpose of an appeal because it was a right that lay equally, if not more so, in the power of Nilant to vindicate, if he so desired. If he did not so desire, as became apparent was the case, then the interests of justice did not require that the first respondent should be permitted to appeal. This is because, even if the first respondent was successful on appeal, the result of the appeal would be of no practical consequence.
84 As to the second interest, I accept for the purposes of these reasons that a solicitor or firm whose professional reputation is affected by a decision of a court, if not a party, may in limited cases be joined to enable them to appeal the decision to seek to vindicate their reputation, as this appears to be the effect of Heenan J's and Robert-Smith J's decisions in this matter and their Honours' decisions are not under appeal. However, I consider that the first respondent when joined for such a limited purpose was interfering in the resolution of the substantive issues between the original parties and had an obligation to expeditiously prosecute its appeal. Generally speaking it is not in the interests of justice for the focus of litigation to be taken away from the resolution of the issues of substance between the parties and instead to be directed at what can only
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be regarded as a subsidiary issue. If it is to occur it should be done as quickly and efficiently as the Rules and the resources of the court allow.
85 As to the third possible interest, the mere fact that the first respondent was bound by the decision may well have been a factor warranting consideration in the exercise of the discretion to permit the first respondent to be joined for the purpose of an appeal but unless Nilant wished to continue to instruct it, the fact that the first respondent was bound by the decision was of no moment.
86 The first respondent did not enter its appeal in FUL 143 of 2002 within time and so made an application which was heard by a learned Master to extend time within which to enter the appeal. By the time the first respondent's application for an extension of time was heard Nilant, the liquidator, had instructed other solicitors in COR 313 of 2000 and a related matter, COR 363 of 1999. Further, Nilant had applied for and been granted an order of this Court that he resign as liquidator and his new solicitors had advised, in writing, that he did not wish to reappoint the first respondent as his solicitors. All this seems to have been known to the learned Master who heard the application for an extension of time.
87 Thus, the only remaining interest that the first respondent had in the prosecution of the appeal was to vindicate what it or Mr Metaxas regarded as a slight on its or his reputation. In this respect it would have been relevant for the Master to ascertain from a perusal of the judgment appealed from just how significant a slight that was. In my view, in order for the first respondent to be granted the indulgence of the court to extend time to enter the appeal the slight would have to be significant. In effect the first respondent had already been granted an indulgence by the court in having its application to be joined as a party granted. It was then seeking a second indulgence when the circumstances had changed so as to alter the balance between the competing factors to be weighed by the learned Master.
88 A review of the learned Judge's reasons for decision appealed from do not reveal any criticism of the first respondent or Mr Metaxas that, in my view, justified the court allowing its time to be taken up in the conduct of and determination of the appeal, having regard to the failure of the first respondent to diligently prosecute the appeal in the first place. Unless a decision to restrain a solicitor or a firm of solicitors from acting for a party prejudices a party to the substantive action or there is a real prospect that the decision, if unreversed, will have a prejudicial effect on the professional reputation or business of the firm or the solicitor it is not in
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the interests of justice and it is prejudicial to the administration of the court for the resources of the court and the parties to the substantive litigation to be diverted from the resolution of the real issues between the parties by an appeal by the solicitors which has not been entered within time. In my opinion this was not a case where the above exceptions were made out.
89 In the course of the decision on the conflict of interest, his Honour criticised the strong language used in the written submissions filed on behalf of Nilant. The appeal was never likely to vindicate Mr Metaxas in that respect. As Templeman J says it is disappointing that two senior practitioners should bicker as Mr Staffa and Mr Metaxas have in this matter. That is whether it be in their correspondence or their written submissions.
90 Thus, whilst interlocutory appeals are generally to be discouraged, in my opinion, a point of importance is involved in this case. For the reasons given above I am of the opinion that the learned Master's discretion miscarried and I would grant leave to appeal in FUL 59 of 2003 and allow the appeal.
91 Consequently I would not hear the appeal in FUL 143 of 2002. However, as the other members of the Court would dismiss the application for leave to appeal in FUL 59 of 2003, the appeal in FUL 143 of 2002 is extant and I must deal with it. In respect to the substantive appeal I agree that for the reasons given by Templeman J it should be allowed.
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