JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WILLIAMSON & ANOR -v- NILANT [2002] WASC 225
CORAM: McKECHNIE J
HEARD: 30 AUGUST 2002
DELIVERED : 18 SEPTEMBER 2002
FILE NO/S: COR 313 of 2000
MATTER :LPO TRANSACT PTY LTD (ACN 072 999 716) (IN LIQ)
BETWEEN: IAN EDWARD WILLIAMSON
First Plaintiff
YOGAN SOOBIAH NAIDOO
Second PlaintiffAND
CHARLES PHILIPPE LOUIS NILANT
Defendant
Catchwords:
Corporations - Company in liquidation on grounds of oppression - Lawyers acting for liquidator and a party to the winding up
Legal practitioners - Conflict of interest - Duty to advise liquidator - Solicitor also acting for party interested in litigation - Conflict of roles
Court's practice and procedure - Inherent power to control legal practitioners to protect administration of justice
Legislation:
Nil
Result:
Plaintiff's claim to prevent legal practitioner acting for liquidator
successful
Category: A
Representation:
Counsel:
First Plaintiff : Mr K C Staffa
Second Plaintiff : Mr K C Staffa
Defendant: Mr A Metaxas
Solicitors:
First Plaintiff : Kevin Staffa
Second Plaintiff : Kevin Staffa
Defendant: Metaxas & Vernon
Case(s) referred to in judgment(s):
Afkos Industries Pty Ltd v Pullinger Stewart (A Firm) [2001] WASCA 372
Black v Taylor [1993] 3 NZLR 403
Contract Corporation, In re Gooch's Case (1871) LR 7 Ch App 207
Grimwade v Meagher (1995) 1 VR 446
Case(s) also cited:
A Solicitor [1987] 131 SJ 1063
Aboriginal & Torres Strait Island Commission v Jurnkurakurr Aboriginal Resource Centre Aboriginal Corporation (In Liq) (1993) 11 ACLC 319
Advance Housing v Newcastle Classic Developments (1994) 12 ACLC 701
Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307
David Lee & Co (Lincoln) Ltd v Coward Chance (a firm) [1991] Ch 259
Davies v Clough (1837) 8 Sim 262; 59 ER 105
Domino Hire Pty Ltd v Pioneer Park Pty Ltd (2000) 18 ACLC 13
Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737
Freuhauf Finance Corporation Pty Ltd v Feez Ruthning [1991] Qd R 558
In re A Firm of Solicitors [1992] QB 959
Intercontinental Properties Pty Ltd (1977) 2 ACLR 488
Kooky Garments Ltd v Charlton [1994] 1 NZLR 587
Lubin, Rosen & Associates Ltd [1975] 1 WCR 122
Macquarie Bank Ltd v Myer [1994] 1 VR 350
Murray v Macquarie Bank Ltd (1991) 33 FCR 46
Oceanic Life Ltd v HIH Casualty and General Insurance Ltd [1999] NSWSC 292
Prince Jefri Bolkiah v KPMG (A Firm) [1999] 2 WLR 215
Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831
Re A Firm of Solicitors [1997] Ch 1
Re Biposo; Condon v Rodgers (1995) 13 ACLC 1,271
Re Club Superstores Australia Pty Ltd (In Liq) (1993) 10 ACSR 730
Tracker Software International Inc v Smith (1997) 15 ACLC 1,407
Watson v Watson, unreported; SCt of NSW (Santow J); 25 May 1998; [1999] NSWSC 800
Wood & Wood v Targett (1997) 15 ACLC 756
Yunghanns v Elfic Ltd, unreported; SCt of Vic…
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- AGLC
- Williamson v Nilant [2002] WASC 225
- Case
- [2002] WASC 225
- Decision Date
CaseChat Overview and Summary
The court had to determine whether the conflict of interest was sufficient to warrant the removal of Metaxas & Vernon as solicitors for the liquidator. This involved assessing whether the liquidators could maintain impartiality between the interests of all parties involved in the liquidation, especially given their concurrent role as solicitors for Rama. The court had to balance the inherent jurisdiction to control its processes and those of its officers against the right of parties to choose their legal representation.
The court concluded that the inherent jurisdiction of the court extended to restraining legal practitioners from acting in situations where a conflict of interest might compromise the administration of justice. The court adopted a test that considered whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required the solicitor to be restrained from acting. Given the evidence, the court found that the conflict between the interests of Rama and the liquidator's duty to act impartially was significant enough to warrant the removal of Metaxas & Vernon as solicitors for the liquidator.
The court ordered that Metaxas & Vernon be removed as solicitors for the liquidator to prevent any potential conflict of interest from compromising the impartiality of the liquidation process.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Cases will differ. In not every case where a solicitor acts for a liquidator and a party interested in the liquidation will there be a conflict. However, in the present case it seems to me there is sufficient reason to cause Metaxas & Vernon to be removed as solicitors for the liquidator. A liquidator's duty was long ago stated to be:"… it is of the utmost importance that the liquidator should … maintain an even and impartial hand between all the individuals whose interests are involved in the winding‑up. He should have no leaning for or against any individual whatever." (Contract Corporation, In re Gooch's Case (1871) LR 7 Ch App 207 at 211). This is not a case where the solicitor has come into possession of confidential information while acting for one client and there is a risk that confidential information may be disclosed when acting for another client; Newman v Phillips Fox (1999) 21 WAR 309. Nor is it a case where the solicitor has some form of stake in the outcome such as to raise a query as to the independence of the solicitor from the cause of action: Afkos Industries Pty Ltd v Pullinger Stewart(A Firm) [2001] WASCA 372, Rather, this is a case which falls within the inherent jurisdiction of the Court and particularly in the necessity for the Court to control its processes and those of its officers, including liquidators. 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.