Williamson v Nilant
[2003] WASC 21
WILLIAMSON & ANOR -v- NILANT [2003] WASC 21
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 21 | |
| Case No: | COR:313/2000 | 15 JANUARY 2003 | |
| Coram: | ROBERTS-SMITH J | 15/01/03 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application refused | ||
| A | |||
| PDF Version |
| Parties: | IAN EDWARD WILLIAMSON YOGAN SOOBIAH NAIDOO CHARLES PHILIPPE LOUIS NILANT |
Catchwords: | Courts practice and procedure Joinder of parties Conflict of interest Order restraining solicitors from acting Solicitors wishing to appeal Order that solicitors be joined as second defendant Application to set aside order for joinder |
Legislation: | Nil |
Case References: | Birtles v Commonwealth of Australia [1960] VR 247 Cook & Ors v Northoak Holdings Pty Ltd & Anor (1997) 25 ACSR 517 Gracechurch Holdings Pty Ltd v Breeze & Anor (1992) 7 WAR 518 National Australia Bank Ltd v Wily [2002] NSWSC 573 The Millwall [1905] P 155 Williamson & Anor v Nilant [2002] WASC 225 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Applicant
YOGAN SOOBIAH NAIDOO
Second Applicant
AND
CHARLES PHILIPPE LOUIS NILANT
Respondent
Catchwords:
Courts practice and procedure - Joinder of parties - Conflict of interest - Order restraining solicitors from acting - Solicitors wishing to appeal - Order that solicitors be joined as second defendant - Application to set aside order for joinder
Legislation:
Nil
(Page 2)
Result:
Application refused
Category: A
Representation:
Counsel:
First Applicant : Mr K C Staffa
Second Applicant : Mr K C Staffa
Respondent : Mr A Metaxas
Solicitors:
First Applicant : Kevin Staffa
Second Applicant : Kevin Staffa
Respondent : Metaxas & Vernon
Case(s) referred to in judgment(s):
Birtles v Commonwealth of Australia [1960] VR 247
Cook & Ors v Northoak Holdings Pty Ltd & Anor (1997) 25 ACSR 517
Gracechurch Holdings Pty Ltd v Breeze & Anor (1992) 7 WAR 518
National Australia Bank Ltd v Wily [2002] NSWSC 573
The Millwall [1905] P 155
Williamson & Anor v Nilant [2002] WASC 225
Case(s) also cited:
Nil
(Page 3)
1 ROBERTS-SMITH J: This is an application by Mr Staffa on behalf of the first and second plaintiffs to have set aside an order made by Heenan J on 8 October 2002 that Charles Philippe Louis Nilant be designated as the first defendant in this action and that the solicitors Metaxas & Vernon be joined as second defendants.
2 His Honour made a further order that other parties have liberty to apply to revoke or vary the order within 21 days of it being served upon them. The present application is being made pursuant to that liberty to apply.
3 It is not necessary to set out in any detail at all the substance of the substantive action, suffice to say it involves, in part, the process of liquidation of LPO Transact Pty Ltd which was placed in provisional liquidation on 23 December 1999, on the application of Rama Krishna Baramuthu Naidoo referred to in the proceedings as Rama.
4 Mr Nilant, the first defendant, is the court appointed liquidator and was at the relevant time being represented by the firm Metaxas & Vernon. As a result of the fact that Metaxas & Vernon were also acting for Rama an application was made by the first plaintiff to seek the removal of that firm from the record in relation to this particular matter.
5 That application came before McKechnie J on 30 August 2002 and his Honour handed down his judgment on 18 September 2002, Williamson & Anor v Nilant [2002] WASC 225. His Honour came to the conclusion that the case was one which fell within the inherent jurisdiction of the Court in the necessity for it to control its processes and those of its officers, including liquidators. His Honour concluded on the application that he was satisfied that the conflict which might arise between the interests of Rama, which Metaxas & Vernon were obliged to legitimately advance, and the necessity to give impartial advice and representation to the liquidator of LPO Transact Pty Ltd, was such that the interests of justice required the solicitors be restrained from acting for the liquidator. His Honour so ordered.
6 Indeed, as Mr Metaxas, who appears before me for his firm, pointed out, the extracted order subsequently issued was an order that Metaxas & Vernon, solicitors, be restrained from further acting for the defendant in these proceedings; that is to say, it was not an order which was directed to the liquidator but an order directed to and restraining the solicitors. His Honour ordered that the defendant pay the plaintiffs' costs of and incidental to that application.
(Page 4)
7 Metaxas & Vernon subsequently applied for an order joining that firm as a party to the proceedings so that they could appeal his Honour's decision. That application was supported by an affidavit of Mr Metaxas sworn 8 October 2002. As I have indicated, the order was made by his Honour Heenan J on 8 October 2002. The application now made is for revocation of the order made by Heenan J.
8 So far as the facts of the matter are concerned, it is probably necessary only to mention that on or about 3 October 2002 the liquidator appointed solicitors Ian Tait & Co to act on his behalf in relation to the relevant matters. By letter dated 11 October 2002, that firm advised that the liquidator did not wish to reappoint Metaxas & Vernon as his solicitors in the proceedings and on 6 December 2002 he made an application in one of the proceedings for an order that he resign as liquidator of LPO Transact Pty Ltd and on 19 December 2002, Master Sanderson ordered that the liquidator resign.
9 The factual position underlying the proceedings is relied upon by Mr Staffa as indicative of the fact, as he puts it, that an appeal by Metaxas & Vernon against the decision of McKechnie J would be futile in any event because even were the order restraining that firm acting for the liquidator to be set aside, there is no possibility nor prospect that the firm would or could act for that liquidator in the proceedings. The submission is further made that Metaxas & Vernon do not have any legal rights which have been infringed as a result of any tort, breach of contract, interference with their property or breach of statutory duty.
10 Mr Metaxas puts the application, or rather his firm's position, on the basis first that the order was made directly against the solicitors, and secondly, that a finding of conflict of interest in the circumstances is tantamount, in effect, to a finding of unprofessional conduct.
11 I do not know that it necessarily goes that far. It seems to me whether that is so would depend upon the facts and circumstances of the particular case. Nonetheless it does seem to me 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 that firm professionally.
12 The starting point of Mr Metaxas' submissions was that the finding made by his Honour was in fact wrong in that it was not founded in the evidence. The contention is advanced (or would be sought to be advanced on the appeal) that his Honour found a conflict which was not identified
(Page 5)
- and cannot be supported on the evidence before him. Alternatively it is put that what must necessarily have been underlying his Honour's reasoning or concern was the necessity for the appearance of the impartiality of the liquidator rather than a conflict of interest on the part of the solicitors.
13 Mr Metaxas relies on National Australia Bank Ltdv Wily [2002] NSWSC 573 as authority for the proposition that the mere fact that a solicitor represents a liquidator and a party does not itself represent a conflict of interests and indeed is commonplace. There seems to be merit generally in that submission, at least in the ordinary course of events, and subject, as Burchett JA pointed out at [11] of that case, to what the situation may be in extraordinary or unusual circumstances.
14 So far as the merits of the proposed appeal are concerned, Mr Metaxas submits that in any event the matters in respect of which his firm was representing Rama were different matters which had nothing to do with the liquidation and accordingly there was factually no prospect and no actual nor perceived conflict of interest.
15 Those matters, as I say, go to the prospects of success on the appeal. It really is unnecessary, I think, for me to either express any view or say anything further about them. I am satisfied, should it be necessary, that the proposed appeal would be at least reasonably arguable and it is unnecessary for me to go beyond that. The real issue before me of course is whether or not the joinder was proper and should be allowed to stand and that turns upon the interest of the solicitors which they seek to protect.
16 In that regard my attention has been drawn to the observation made by McKechnie J at [1] of his reasons for decision:
"This is an application by chamber summons to prevent a firm of solicitors from further acting for a liquidator. It may well have been better if the application had been brought by way of originating motion naming the solicitors as defendants but no point is taken about the procedure used. …"
17 Mr Metaxas' submission is that there ought to have been separate proceedings issue in respect of the application for restraint of the solicitors, naming them as defendants, in which case there would have been no question but that they would have had a right to appeal. Mr Staffa says, to the contrary, that although that may have been one way to proceed, the fact is that was not the procedure followed and in the event when the proceedings on that application were resolved against the
(Page 6)
- solicitors and the question of costs arose, the submission was made on their behalf at that time that they were not a party and that any costs order could only be made against the defendant.
18 That in fact is what occurred. As Mr Staffa puts it, the solicitors in that way effectively declined the opportunity at that time to become a defendant. To my mind that circumstance is not one which militates against the maintenance of the order made by Heenan J. The present application is to be dealt with on the basis of principle and whether or not in particular the solicitors have a relevant interest which would justify their joinder as defendant in these proceedings.
19 Although not directly on point, two authorities referred to by Mr Metaxas do I think assist. The first is Gracechurch Holdings Pty Ltd v Breeze & Anor (1992) 7 WAR 518. That was a case which involved a third party who wished to appeal a judgment between a plaintiff and another party. The point was recognised in that case, and particularly by Ipp J at 521, that the general rule is that there is no right of appeal by a third party against a judgment in favour of the plaintiff but, as his Honour pointed out, that rule is subject to certain exceptions.
20 The first one to which his Honour referred is that a third party may appeal against the principal judgment if he is directed to be bound thereby, referring to The Millwall [1905] P 155. I pause there to note that that is exactly the situation which obtains in this case, although it was not the position in Gracechurch Holdings itself.
21 His Honour went on to say even notwithstanding the absence of third party directions leave would be given to a third party to appeal directly against a plaintiff whenever it is just and convenient to do so. In Cook & Ors v Northoak Holdings Pty Ltd & Anor (1997) 25 ACSR 517 a receiver appealed by leave against a decision of a master which had included in part findings of bad faith or misconduct on the part of the receiver.
22 In the event, in dealing with the substantive appeal by the party who was the appellant, the Court, as appears from the judgment of Steytler J, particularly at 19, came to the conclusion that the sole concern of the receiver rested with the learned Master's findings of bad faith and impropriety. His Honour concluded earlier that there was no sufficient basis for those findings because the receiver had not been cross-examined on his affidavit. The findings of the Master pertaining to the conduct of the receiver were therefore set aside.
(Page 7)
23 There can be no doubt that the transaction which would justify joinder exists here in the ordinary sense. I note that in Birtles v Commonwealth of Australia [1960] VR 247, the failure of a solicitor to issue a notice of the plaintiffs' intention to sue within time, thus allowing the action to become statute barred, was a transaction of a nature allowing the joinder of a solicitor as a defendant.
24 Generally speaking, as a matter of principle, for a joinder to be justified there must be some causal act or breach or circumstance on the part of the defendant which arises out of or in relation to the same matter, circumstance or events as does the claim against the other defendant or defendants.
25 In the event I am persuaded that in the circumstances of this case and bearing in mind in particular that the order made by McKechnie J was an order made against and directed specifically to the solicitors, it is proper and appropriate that they should remain as second defendant in the proceedings, thereby entitling them to a right of appeal against his Honour's judgment and I find accordingly.
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