Hillier v Martin

Mr Martin's interlocutory application - standing 14 Mr Martin brings his interlocutory application on the basis he is an "interested party", notwithstanding that no relief is sought against him. He is however, identified in the proposed fourth amended statement of claim as a party allegedly involved in a conspiracy. 15 Mr Martin's interlocutory application came before the Court on 27 July 2022, Mr Whitington QC appeared for Mr Hillier and submitted that Mr Martin had no standing to bring his interlocutory application. The new solicitors for the first and second respondents, and Mr Blight QC for the proposed fourth, fifth and sixth respondents, took no position. 16 I indicated to Mr Martin that he needed to satisfy me he had standing to bring his interlocutory application before I would list his interlocutory application for argument. 17 Mr Martin made order submissions and asked during the course of the hearing that I grant him leave to file a short affidavit on the question of standing. I refused that request indicating to him that he could explain to me why it was that he had standing to bring his application.

Submissions on the law 18 During the course of his submissions as to why it is that Mr Martin does not have standing to bring his application, Mr Whitington QC referred to two authorities: Ashby v Slipper [2014] FCAFC 15, (2014) 219 FCR 322 and Lawrie v Lawler [2016] NTCA 03, (2016) 168 NTR 1. 19 Mr Martin requested the opportunity to file written submissions on the law in relation to why he has standing to bring his application. I acceded to that application and directed that he file and serve written submissions on the law directed to his standing to bring his application, limited to three pages, by on or before 3 August 2022. I adjourned the question of Mr Martin's standing to bring his application to 9 August 2022. 20 Mr Martin served written submissions on 3 August 2022. Contrary to leave granted, Mr Martin's submissions were not directed solely to the law in relation to his standing to bring his application and comprised seven pages in which he re-agitates one of the matters raised in his oral submission made on 24 July 2022. Nonetheless, I have considered them. 21 At the hearing on 9 August 2022, Mr Martin also sought to read his 6th affidavit sworn and filed on 21 July 2022. There being no objection, I took Mr Martin's 6th affidavit as read, but for the limited purpose of determining if he had standing to bring this interlocutory application. 22 In Ashby v Slipper, the Full Court (Mansfield, Siopis and Gilmour JJ) considered an application for leave to appeal from a decision of a judge of the Court to summarily dismiss the proceedings. 23 In his decision, the primary judge had made adverse findings about the conduct of Ashby's solicitor. The solicitor was not named as a party to the proceedings. The solicitor sought leave to appeal in order to challenge the adverse findings made against him arguing the findings either had or have the potential to affect his professional reputation and consequently the financial interests of his firm. 24 The majority (Mansfield and Gilmour JJ) held it was open to the primary judge to consider the solicitor's conduct as an officer of the Court in relation to the institution of the proceedings. However, their Honours did not consider the solicitor was given adequate notice concerning the allegations giving rise to findings, which in effect, were of unprofessional conduct against him: Ashby v Slipper [135]. 25 On the question of whether the solicitor had been given adequate notice or the opportunity to defend himself, the majority said: Ashby v Slipper [141]-[143]: 141 These concerns in respect of Harmer, and which affected Ashby, were serious and the potential consequences grave. Indeed we regard them as at the extreme end of those which might be raised against a solicitor. In such circumstances, there was the need for caution in drawing adverse inferences against Harmer, particularly where such inferences and their significant consequences had not been specifically put to Harmer. The comments in Bale v Mills (2011) 81 NSWLR 498 are apposite. The New South Wales Court of Appeal said at [79]: The inference sought was one, but only one, possibility. The matters to which we have already referred… in discussing what was not put to Mr Schipp reveal that a recognition of error and conscious dishonesty are not the only possible explanations. The inference that Mr Schipp was aware of the error and intentionally deceived his client is a possibility. It is a possibility about which minds might differ as to whether it is sufficiently probable to be a proper inference, that is more probable than not... In our view that inference cannot be drawn as more probable than not, for the reasons set out below. Most importantly, however, could it be drawn with the requisite confidence in circumstances where that inference and its significance was never raised with Mr Schipp so that he was deprived of any opportunity to respond to it? The answer is plainly, no. 142 Where serious issues are raised in proceedings concerning a non-party solicitor in relation to the professional conduct and which go to that solicitor's integrity, the matters alleged require careful consideration. Where, as here, there has been no specific pleading or identification of those issues, and no cross-examination of the solicitor upon material issues which the solicitor has explained by affidavit, the opportunity to elucidate or explain such matters is very important. As the Court of Appeal in Bale v Mills stated at [66]: Fairness in the administration of justice extends not only to ensuring a fair trial for the actual parties but also to ensuring that a witness who is not a party is treated fairly. It is especially important in circumstances such as the present, where a witness such as Mr Schipp had himself no right to object to his credit being impugned with respect to the Centrelink representation and where he was not given the opportunity to respond to what was clearly an extremely serious allegation not only going to his credit as a witness but also, as the primary judge was at pains to emphasise, to his honesty as a person and to his probity as a solicitor and an officer of the court. Further, the unfairness consequential upon the breach struck directly at the entitlement of the appellants to a fair hearing and procedural fairness in the making of findings by the District Court. 143 The denial of this opportunity, and lack of personal representation, rendered Harmer in an effectively defenceless position in relation to the concerns as to his professional integrity raised by the primary judge. In our view, his Honour ought to have refrained from making serious findings about Harmer's professional conduct and integrity. 26 In Lawrie v Lawler, the respondent was appointed a Commissioner under the Inquiries Act 1945 (NT) to inquire into the offer of a Crown lease to Unions NT for a term of 10+10 years. The offer had been made on the last working day prior to the caretaker period beginning in the lead up to the 2012 general election in the Northern Territory. Although the Secretary of the Union signed the documents that day, the Union did not pay the required fees nor affix the seal of Unions NT until after the caretaker period had commenced. The lease was not registered, and the site the subject of the lease remained unalienated Crown land. 27 The Commissioner produced a report containing numerous findings and criticism adverse to the appellant. 28 The appellant instituted proceedings in the Supreme Court of the Northern Territory seeking relief to the effect that the respondent had failed to observe the requirements of procedural fairness in making adverse findings and criticisms of her and seeking an order in the nature of certiorari that the report be quashed. 29 The primary judge dismissed the appellant's claim and in so doing made adverse findings relating to the conduct of Ms Lawrie, her barrister - Mr Wyvill SC - and his instructing solicitor, Ms Spurr. 30 Before the Court of Appeal, Mr Wyvill applied for leave to intervene or to be heard as amicus curiae based on the criticisms made of him by the primary judge. The Court refused the application to intervene as a party or as amicus curiae on the basis that Mr Wyvill could only be joined as a party for the purposes of challenging an order or judgment by which he was bound, not for the purpose of only an attack upon the judge's reasons: Lawrie v Lawler [49] (Doyle, Duggan AJJ). Heenan AJ, also refusing the application, held that Mr Wyvill was not bound by the order dismissing the appellant's application for review or by any of the findings which were made by the primary judge in his reasons for decision: Lawrie v Lawler [318]. 31 It does not appear that the question as to whether or not the primary judge should have given Mr Wyvill (or for that matter his instructing solicitor) the opportunity to defend themselves, arose for consideration given the refusal to allow him to intervene or appear as amicus curiae. In any event, the decision is not authority for the proposition that Mr Martin has standing as a non-party to bring his interlocutory application at this stage of the proceedings.

Mr Martin's written submissions 32 In his written submissions, Mr Martin makes a number of points. 33 First, he seeks to distinguish both Ashby v Slipper and Lawrie v Lawler on the basis both cases concerned the standing of non-party legal practitioners who had sought leave to appeal against adverse findings about their conduct in circumstances where those practitioners represented parties at the proceedings. In contrast, Mr Martin submits that in his case, he is not representing any of the parties. 34 It is the case that Mr Martin does not represent any of the current parties nor the proposed respondents In Ashby v Slipper, the judgment of the majority makes it clear that it was important for the primary judge to give the solicitor acting for one of the parties the opportunity to defend himself before making serious findings about the solicitor's professional conduct and integrity. 35 The fact Mr Martin does not act for any of the parties or for the proposed respondents is not a basis to distinguish Ashby v Slipper. 36 I am informed by Mr Martin that he is to be a witness at the trial of this matter and that he has filed an affidavit which is to stand as his evidence in chief. In my view, the protection of Mr Martin as a non-party from adverse findings and the opportunity for Mr Martin to defend himself is a topic to be addressed either at the pre-trial procedure stage, where the question of whether the trial judge is going to be asked to make adverse findings against Mr Martin can be raised, or alternatively, if the question arises during the course of the trial, at that stage. The important point remains that if a trial judge is to be asked to make adverse findings against a non-party following a contested hearing, then depending on the consequences of the adverse findings to the non-party, consideration should be given by the trial judge as to whether that non-party is to be given the opportunity to defend himself or herself. 37 Therein lies a critical point of distinction between the protection to be afforded to a non-party against adverse findings following a contested hearing, and Mr Martin's standing to bring his interlocutory application at this stage of the proceedings. 38 It is not the case that because matters are proposed to be pleaded against a non-party, the non-party thereby has standing to appear, make submissions and adduce evidence in opposition to a proposed pleading or the joinder of other parties. 39 Lawrie v Lawler does not assist Mr Martin's case given that as a non-party, he is not bound by any order or judgment of the court. 40 The second point made by Mr Martin is that the interests, rights and liabilities of a non-party should not be substantially affected by the exercise of the court's jurisdiction without first affording an appropriate opportunity to be heard in relation to them. Mr Martin refers to Levy v Victoria [1997] HCA 31, (1997) 189 CLR 579, 601-602 (Brennan CJ) and Roadshow Films Pty Ltd v iiNet Ltd [2011] HCA 54, (2011) 248 CLR 37 at [2] and [6] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ). 41 In Levy v Victoria, the High Court was concerned with the validity of a regulation that prohibited persons other than the holders of valid game licenses from entering into any permitted hunting area between certain hours on each of two specified dates. The Court was considering intervention by a non-party and in the passage referred to by Mr Martin, Brennan CJ observed that the legal interests of a person may be affected in a more indirect way rather than being bound by the decision itself. His Honour observed that a non-party may be bound by precedent given the High Court's position whereby the exercise of the jurisdiction conferred on the High Court is not subject to appeal, nor review by any other court, such that a declaration of a legal principle or rule by the Court determines the law to be applied by all Australian courts in cases that are not distinguishable. 42 It is immediately apparent that Levy v Victoria does not assist Mr Martin. The same point as made above in relation to Ashby v Slipper and the role of the trial judge is apposite. 43 In Roadshow Films Pty Ltd, the High Court was considering an application by non-parties for leave to intervene in an appeal before it. The Court said: at [2], [3]: 2 In determining whether to allow a non-party intervention the following considerations, reflected in the observations of Brennan CJ in Levy v Victoria, are relevant. A non-party whose interests would be directly affected by a decision in the proceeding, that is one who would be bound by the decision, is entitled to intervene to protect the interest likely to be affected. A non-party whose legal interest, for example, in other pending litigation is likely to be affected substantially by the outcome of the proceedings in this Court will satisfy a precondition for leave to intervene. Intervention will not ordinarily be supported by an indirect or contingent affection of legal interests following from the extra-curial operation of the principles enunciated in the decision of the Court or their effect upon future litigation. 3 Where a person having the necessary legal interest can show that the parties to the particular proceedings may not present fully the submissions on a particular issue, being submissions which the Court should have to assist it to reach a correct determination, the Court may exercise its jurisdiction by granting leave to intervene, albeit subject to such limitations and conditions as to costs as between all parties as it sees fit to impose. (Italics omitted) 44 Once again, this judgment and the passages cited above reflects the High Court's position as the final court of appeal. Accordingly, this decision does not assist Mr Martin's position. 45 Mr Martin's third point refers to another interlocutory application filed by Mr Hillier on 23 June 2022. That application seeks, amongst other things, a restraining order against the first and second respondents from making any payments out of the funds, assets, entities, trusts or businesses that trade or conduct business under the "Nordburger" name or brand. The orders sought name Mr Martin as a party to be restrained. Mr Martin submits that since Charlesworth J, who is hearing that application, has granted Mr Martin leave to appear because of the potential impact upon him, it would "… lead to an extraordinarily perverse result …" if his standing was not recognised on this application. 46 That submission should also be rejected. Mr Hillier's interlocutory application filed on 23 June 2022 seeks specific orders against Mr Martin. That is not the case with this interlocutory application. 47 Fourth, Mr Martin raises concerns as to the adequacy of the proposed fourth amended statement of claim. That has already been the subject of detailed submissions by the proposed respondents whereas this document concerns his standing to bring his application. 48 A fifth point raised by Mr Martin is that, to use his words contained in [5] of his written submissions, in his personal capacity he: (a) Has control of the funds, assets, and business that are in dispute: 4ASoC [62]; (b) Receives weekly payments from those disputed funds to which he is allegedly not entitled; (c) Having provided no services justifying such a payment: 4ASoC [62.2]; (d) Has received loans from those funds which are allegedly not intended to be repaid thus will need to be recovered: 4ASoC [62.4]; (e) Currently holds all the shares in the second respondent, over which a constructive or remedial trust must be imposed for Mr Hillier to obtain his claimed relief, on the basis of the allegation at 4ASoC [73.4] that the shares had previously been held by the first respondent on trust for the fictitious "Joint Venture", prior to being transferred to him; (f) Holds the shares in the second respondent, which also holds various intellectual property rights and trademarks, again, allegedly on trust for the fictitious "Joint Venture"; (g) Is potentially exposed - as can safely be presumed from the allegation at 4ASoC [62.2], to orders sought by Mr Hillier eventually requiring Mr Martin to refund or return allegedly misappropriated trust monies and/or property, as currently sought only against the first respondent at 4ASoC [75.6]; (h) Is presently liable to be restrained by interlocutory injunction in the form of a freezing order under the Federal Court Rules, from continuing to receive the payments as alleged at 4ASoC [62.2], and to be subject to a requirement that any payments received are to be refunded; (i) Is personally responsible for the suspected but entirely imaginary abstraction of $250,000 from the bank account of Nordburger Capital Pty Ltd on 26 March 2022, for the benefit of person or persons unknown, but who must, at least by implication, be taken to include Mr Martin and his spouse, the first respondent, or their associates, and which Mr Hillier's 23 May Interlocutory Application sought to be repaid as a misappropriation in breach of trust and contravention of Court order; and (j) Potentially liable for punishment for deliberate and contumacious contempt of orders of the court, in relation to financial transactions enacted for the benefit of Mr Martin and the first respondent, and which Charlesworth J had characterised, unprompted, and without correction by Mr Hillier's solicitors present at the hearing, as involving allegations of "some form of accounting fraud". 49 The matters set out above referred to 4ASoC at [62.2], [62.4], [73.4] and [75.6]. When those paragraphs of the proposed 4ASoC are considered: (1) [62.2] contains allegations against the first respondent (Ms Martin). As I have noted, no relief is sought against Mr Martin. If Mr Hillier is successful in establishing his allegations in [62.2] then the findings will be made against Ms Martin; (2) [62.4] contains allegations that Ms Martin caused Nordburger Pty Ltd to make Division 7A loans to herself and her associates. Again, these are allegations directed to Ms Martin; (3) [73.4] is part of the Prayer for Relief. It seeks a declaration that Ms Martin holds, and at all material times has held, shares in the second respondent on trust on the terms of what is described as the Nordburger Joint Venture Agreement; and (4) [75.6] is also part of the Prayer for Relief. It seeks an order pursuant to s 243 of the Australian Consumer Law that Ms Martin refund any monies and return property she has taken from or caused to be taken from various entities including the second respondent. 50 It may well be that Mr Martin has these funds in his possession or has received funds but primarily the allegations are levelled against Ms Martin. If it becomes necessary for orders to be made against Mr Martin, that is an issue for Mr Hillier in circumstances where no orders and no relief are sought against Mr Martin. 51 I do not consider the matters comprising the 5th point relied upon by Mr Martin gives him standing to bring his interlocutory application.

Mr Martin's oral submissions on 27 July 2022 52 Ultimately, Mr Martin identified five matters which, he submitted, gave him standing to bring his interlocutory application as an "interested party": (a) The proposed fourth amended statement of claim annexed to Mr Hillier's eighth affidavit alleges he was involved in a civil conspiracy to cause harm to the applicant by unlawful means; (b) He has a financial interest in the sense that the first respondent, Ms Victoria Martin, is his wife; (c) The allegations in the proposed fourth amended statement of claim impacts upon his reputation both personally and professionally; (d) He may be exposed to civil liability and/or he may be joined to the proceedings later; and (e) There may be findings at trial which implicate him in criminal offending.

Allegations of being involved in a civil conspiracy 53 As to the first matter, to the extent Mr Martin is concerned that adverse findings may be made against him, a number of matters arise. The first is that Mr Hillier will need to consider whether he proposes to ask the trial judge to make adverse findings against Mr Martin. It may be that the trial judge refuses to do so in circumstances where Mr Martin is not a party to the proceedings. The second is that if Mr Hillier does seek adverse findings against Mr Martin, then as I have noted above, it is open to the trial judge to allow Mr Martin to be represented however, that is a matter for the trial judge. 54 I do not consider that the fact that allegations are made against Mr Martin provide him with standing to bring his application.

Mr Martin has a financial interest in the allegations made against him 55 As I understand this submission, Mr Martin submits that because the first respondent, Ms Martin, is his wife, he has a financial interest in the allegations proposed to be made in the proposed fourth amended statement of claim. That may well be the case, but in that sense Mr Martin is no different from anyone else who has a family member involved in proceedings and against whom allegations are made. I do not consider that this provides Mr Martin with standing to bring his application.

The proposed allegations affect his reputation both professionally and personally 56 The proposed allegations are just that - allegations. They are not evidence and are not established until such time as findings are made. 57 Further, the observations made about the role of the trial judge and how the trial judge deals with any submission, whether during the trial or intimated prior to trial, that adverse findings are going to be sought against Mr Martin apply. I do not consider that this provides Mr Martin with standing to bring his application.

Mr Martin may be exposed to a civil liability 58 Mr Martin submits that he may be joined to the proceedings in which case he has an interest to be heard now. Further, he may be subject to civil liability as a result of any findings made at trial. 59 Given no relief is sought against Mr Martin in the proposed fourth amended statement of claim, it is difficult to see why it is that he may be subject to civil liability based on any findings made at trial. However, if that is a genuine possibility, it is a matter to be addressed by the trial judge. 60 Mr Martin has not yet been joined to the proceedings and has no right to apply to be joined as a party: McAlister v New South Wales [2014] FCA 702, (2014) 223 FCR 1 at [21] (Edmonds J). See also Grant v BHP Coal Pty Ltd [2015] FCA 329 at [10] (Collier J). If he is joined as a party on the application of one of the other parties to the proceedings, then he will have all the rights and obligations of a party to the proceedings. 61 I do not consider that Mr Martin's suggestion he may be exposed to civil liability provides him with standing to bring his application.

Mr Martin may be exposed to a criminal liability 62 Whether or not Mr Martin may be exposed to a criminal liability is a realistic possibility and is a matter that can only be determined at trial. If so, a trial judge is ordinarily expected to provide a warning to a witness who may expose him or herself to criminal liability. This Court is no exception: s 128 of the Evidence Act 1995 (Cth). There is no reason to suggest why that would not be the case when this matter proceeds to trial. 63 I do not consider that this provides Mr Martin standing to bring his application.

Conclusion 64 In these circumstances, I do not consider Mr Martin has standing to bring his interlocutory application. 65 Accordingly, Mr Martin's interlocutory application filed 21 July 2022, insofar as it seeks orders re-opening argument on the applicant's joinder application filed 16 May 2022 and for him to be granted leave, as an interested party, to appear at a re-opened hearing of the applicant's joinder application, make submissions and tender evidence, is dismissed. 66 I will hear from the parties on the issue of the costs of and incidental to the dismissal of the non-party's application. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan.